THE LEONARD LETTER
A weekly electronic newsletter from
Bill Leonard, Member
State Board of Equalization
August 18, 2003

"The sole advantage of power is that you can do more good." -- Baltasar Gracian in The Art of Worldly Wisdom, 1647

UNDER THE DOME

***Recall Update***

The October 7th recall election is now in the hands of a Federal judge. He has been asked to delay the election because of alleged violations of the Federal Civil Rights Act. Monterey County and three other California counties were determined to violate the Federal law. Because of this finding, every action relating to California elections must be approved by the U.S. Department of Justice. This bureaucratic process often takes months, which is why the October 7th election is now in jeopardy. Does Monterey County discriminate against minorities? Of course not! The Federal bureaucrats who made this determination noted that many residents of the county are not registered to vote. They assumed that this means that minorities were not allowed to register to vote. They failed to note that Monterey County is host to several U.S. military facilities and most of those servicemen and women actually register in their home state.

Monterey County should never have been put on the Federal civil rights list, but nobody has had the political will to get this designation removed because no one wants to cross the professional minority agitators who find it so convenient to sue California and Monterey County every time they do not get their way. They oppose the recall and are now trying to defeat the will of the people, including many minorities, by delaying the election.

The most striking occurrence last week is the Democrats' epiphany that tripling the car tax is a very bad idea. Their newfound opposition is not based on any principle. If it were, they could have taken any number of opportunities before the recall to stop the unjust increase. No, their opposition stems from how poorly the tax polls and their fear that voters who get large bills before the election might just support the recall.

However, true to form, when the Legislature returns from recess today, the plan is to repeal the $4 billion car tax increase in exchange for a $3,999,999,999 increase in other taxes. The majority party will argue, without any legal authority, that since the net tax shift is one dollar in favor of taxpayers that such a bill does not require the normal 2/3 vote required by the Constitution.

***Three Cheers for Justice Janice Brown***

Since hearing the announcement a couple weeks ago, I have been overjoyed and want to recognize that President Bush has made a wonderful nomination in California's Justice Janice Rogers Brown for the U.S. Court of Appeals for the District of Columbia Circuit. This court has a history of being a stepping-stone to the United States Supreme Court. I do not know if the President is setting up Justice Brown to replace the next retiring justice in the nation's highest court, but I would also support that nomination as well.

In 1997 Justice Brown issued a strongly argued dissent in a California Supreme Court case that overturned a law requiring parental permission for minors to get an abortion. At the time, I argued in support of the law that it was ridiculous that parental consent is required for kids to get an aspirin at school but not for them to go through a dangerous and radical surgical procedure like an abortion. I am still gratified and heartened by Justice Brown's dissent. She accused the court of abrogating the constitutional rights of parents, and called the case "an excellent example of the folly of courts in the role of philosopher kings."

Brown is the daughter of an Alabama sharecropper and served as the Legal Secretary to Governor Pete Wilson. It is in that capacity that I was privileged to see close up her excellent legal mind and topnotch work.

***Our Internet Vulnerabilities***

For the greater portion of last week, all Board of Equalization offices statewide, including the headquarters in Sacramento, were without email or Internet service as a result of the latest destructive Internet worm. As the nation's attention is focused on the visible struggles against evil overseas, we ignore our domestic susceptibility to Internet mischief at our peril. If our enemies become convinced that they can disrupt our economy by easier means other than flying planes into buildings I have no doubt they will attempt to do so. This should be a security priority for the entire country as well as a higher priority for the BOE.

ISSUE FOCUS

***The Solution for California's Deficit?***

In view of California's fiscal crisis it may behoove us to look to the success of Colorado Taxpayers' Bill of Rights (better known as the TABOR amendment of 1992). TABOR was a refreshing mode of tax reform during Colorado's own deficit crisis in 1992. Its main features require voter approval for new taxes, tax rate increases, increases in multi-year debt or other financial obligation, and revenue increase above inflation plus population (with some exceptions). Excess revenue is returned to voters unless they vote to let the state keep it. The effect of the amendment is to limit the size of government and make it harder to raise taxes. A provision that gives citizens control over revenue decisions, what a novel idea.

***Scholarship Satisfaction***

Florida has been a pioneer in alternative education programs, including the use of McKay Scholarships. More than 375,000 special education students are eligible for these scholarships, which allow students to attend the school of their choice. The Manhattan Institute recently studied parental satisfaction in Florida schools and found that nine out of ten McKay parents were satisfied with how their child's special education needs were being met. Only one in three public school parents were satisfied. McKay students were in smaller classes, with an average of 12.8 students versus the public school average of 25.1. The study also found much lower instances of bullying and abuse in McKay schools. These findings lend support to a statement by John Merrifield, a University of Texas at San Antonio professor who says, "The [public education] system assumes that children, because they're put in schools based on attendance areas, can and should be taught the same things in the same way. Utterly ridiculous -- a denial of the diversity we see around us all the time."

***Questioning Economic Incentives***

A study of economic development incentives in Ohio should lead to more research about economic development incentives elsewhere. Todd Gabe of the University of Maine and David Kraybill of Ohio State University examined 366 Ohio companies that expanded between 1993 and 1995. Some of these firms received assistance from the state's economic development program and some did not. Gabe and Kraybill conclude that the financial incentives made little difference in creating jobs. They concluded that the businesses would have created those jobs even without state assistance. They found that business not accepting the money announced expansions that would create 45 new jobs, and they hit those targets exactly. The businesses that did accept the state money announced expansions of an average of 91 workers, but ended up expanding by only 51 workers. The study has its limits since it only considered existing businesses rather than new businesses, but there are some who view it as another in a line of research that indicates money is not the most important factor in business-location decisions. Governing magazine columnist William Fulton reviewed the results and noted that other factors, such as availability of labor, quality of life, and proximity to infrastructure like airports, matter more than money. Fulton concludes: "Based on Gabe and Kraybill's study, however, it would behoove our governors to focus less on delivering pork directly to the factory owners, and more on putting the pork into labor training, infrastructure and the other things that businesses really need to thrive."

MISCELLANY

***Three More Words to Know***

Each week, the Leonard Letter features a few of the words from a list of 100 words that some educators say every high school student should know. The full list may be viewed at http://www.houghtonmifflinbooks.com/booksellers/press_release/100words/.

31. Gauche (adj.) --- lacking social polish; tactless: It may be gauche for the Democrat Party, which controls the executive and legislative branches, to claim the budget crisis is the fault of the Republican Party minority, but they are doing it anyway.

32. Gerrymander (tr.v.) --- to divide a geographic area into voting districts so as to give unfair advantage to one party in elections: The 2000 redistricting process resulted in California having a new kind of gerrymander that resulted in groups of safe districts for each party.

33. Hegemony (n.pl.) --- the predominant influence, as of a state, region or group, over others: The great out migration from California over the last decade has created a Democrat hegemony in California, mitigated only by the Constitutional requirement for a 2/3rd vote on tax increases and the budget.

BOE AND LEGISLATIVE DATES

August 18 --- Legislature reconvenes.

August 29 --- Last day for fiscal committee to meet and report out bills to the floor.

September 10 & 11 --- BoE meets in Culver City.

September 24 --- BoE meets in Sacramento.

NOTABLE DATES/ HISTORY

August 18, 1587 --- First English child born in America (Virginia Dare)

August 18, 1873 --- First ascent of Mt. Whitney (14,494 feet)

August 19, 1960 --- Francis Gary Powers convicted of spying in U-2 by USSR

August 20, 1866 --- President Andrew Johnson formally declares Civil War over

August 21, 1858 --- First Lincoln-Douglas debate

August 21, 1944 --- Dumbarton Oaks conference opens in Washington, D.C,, establishes the United Nations

August 22, 1775 --- King George III declares American colonies to be in open rebellion

August 22, 1902 --- President Teddy Roosevelt becomes first U.S. President to ride in a car

August 24, 410 --- Rome overthrown by Visigoths, symbolizing the fall of the Western Roman Empire

August 24, 1814 --- British sack Washington, D.C. and burn the White House

August 24, 1891 --- Thomas Edison patents motion picture camera

August 24, 1949 --- NATO established

GENERAL TAX INFORMATION

For answers to your general tax questions, call the Board of Equalization information center. Customer service representatives are available to help you from 8:00 a.m. to 5:00 p.m. Pacific time, Monday through Friday (except state holidays).

Toll-free number: 800-400-7115

TDD service for the hearing impaired
TDD phones: 800-735-2929
Voice phones: 800-735-2922

HOW TO CONTACT ME

Bill Leonard
Board of Equalization
450 N Street, MIC: 78
Suite 2337
Sacramento, CA 95814
Telephone: (916) 445-2181
Fax: (916) 327-4003

 Email to: Bill.Leonard@boe.ca.gov