THE LEONARD LETTER
A weekly electronic newsletter from
Bill Leonard, Member
State Board of Equalization
September 22, 2003

"The proposition that the people are the best keepers of their own liberties is not true. They are the worst conceivable, they are no keepers at all; they can neither judge, act, think, or will, as a political body." --John Adams (1735-1826, Founding Father and President of the United States)

UNDER THE DOME

***Big, Scary Numbers***

This year the Legislature passed and sent 977 bills to the Governor. The good news is that number is 550 less than last year's total. The bad news is that the Governor has already signed some 385 of those into law, compared to only 250 at this same time last year.

Of those bills, an amazing number of them threaten to substantially increase the cost of doing business and creating jobs in this state. Legislators may talk about wanting to improve the state's economy and job climate, but their actions speak louder than their words and those actions will results in job losses for Californians.

Consider just one of those pending laws. Senate Bill 2 institutes a 'play or pay' health care system, mandating that employers either cover 80 percent of their employees' health care costs, or pay into a state-run health care plan. Employers with more than 200 employees also must cover dependents. The price tag on that is estimated at $7 billion. That means $7 billion less that can be spend on salaries and actual jobs, except for the new state bureaucracy that will have to be created to manage this system.

Then there are the "solutions" to the insolvency crisis of California's unemployment insurance (UI) fund. Employment Development Department officials recently said it will take an added $3 billion to $5 billion annually in new employer UI taxes to rescue the failing trust fund.

On top of that is the fact that California businesses had workers' comp rates go up from $9.1 billion in 200, to $15.4 billion in 2002, to now somewhere above $20 billion. On party-line votes, the Legislature approved two workers' comp reform bills, but both measures contained only modest changes and neglected to address the systemic reforms that are needed. Some say the reforms adopted may produce savings of $5-6 billion, but those figures have not been validated the Workers' Comp Insurance Rating Bureau yet. And very little has been said about the parts of the bills that could actually increase costs. (Given the recent propensity of California legislation to fall prey to the law of unintended consequences, do not be surprised when this tab is calculated.) For example, the surcharge that all employers pay on their premiums to cover administration of the system will grow by 500% -- from $20 million to $100 million each year. A whole new bureaucracy will be created, too. The California Insurance Guarantee Association (CIGA) will have $1.5 billion in bonding capacity, which will increase costs to employers, but CIGA's pricetag is unknown.

None of these numbers is business friendly and all of them should scare Californians who are hoping for an economic and budgetary rebound.

***Megan's Law***

One of the travesties that occurred during the frantic last hours of the legislative session was the failure to extend the sunset provision of Megan's Law, the sex offender reporting database. There have been many news reports hinting at the politics behind the defeat of the measure, but I believe all those stories have failed to capture the real issues.

My Chief Deputy, Barbara Alby, was the Assemblymember who wrote the original Megan's Law. Her interest in protecting victims and preventing further abuse and crimes continues to this day so she followed this issue closely. Republicans in the Assembly believed strongly that Megan's law needed to be strengthened by allowing internet access to the list of offenders and they expressed a willingness to vote against any bill that did not include such broadening of the law. Many Democrats opposed this access, arguing for privacy concerns and said they were willing to let the entire law sunset rather than put the information on-line. Ultimately, the author of the bill decided to eliminate this increased access and simply extend the sunset of the existing law. Both sides were playing poker with the safety of our children and should be ashamed for allowing their political games to interfere with that goal we all share.

Several Republican legislators immediately called for a special session so that the Assembly could correct its egregious error and re-implement Megan 's Law. Governor Davis has echoed the interest in a special session, too. The problem now is that there are Democrats who do not want a special session because of internal party wrangling, including who becomes the next Speaker.

Unfortunately, no one wants to touch the most necessary reform of all. In most counties local police are not updating their sex offender files. Therefore, the information in the sex offender database is flawed. The result is the offenders get to live as if Megan's Law does not apply to them. We will not have an effective system until local police actually upgrade their files with current sex offender information. To make that happen, the Legislature will have to tie appropriate of state money to law enforcement to such a requirement. Until the politicians are willing to use that tool on the police, the best system will not exist and our children will be at risk.

ON THE TRAIL

***Polling Problems***

When insider politics becomes front-page news the coverage inevitably turns to the accuracy of polls. That topic was at the forefront this week when the Field Poll issued a statement commenting on the validity of the Los Angeles Times' poll after the Times itself ran an article trying to explain why polls differ. The Field Poll's response was that the Times had neglected to mention that the Times poll over-sampled black voters.

I think all of the polls have a more inherent problem when trying to assess the recall situation. Most polls phrase their questions in the same manner as the question will appear on the ballot. Thus, it is easy for polls to ask: Should Governor Davis be recalled, yes or no? People can answer that and when they see their ballot, it will look substantially the same.

That is not the case when people are asked which of the replacement candidates they will select. Because there are 135 names on the ballot, it is impossible for a pollster to read all of them to the voter being polled. Thus, the pollster has to pick a smaller field, perhaps a half-dozen, of names to be read to the voter. Voters being polled may pick one of those names offered, but that may not reflect their intent when they get to the voting booth. They may really prefer one of the other 129 candidates, but they were being polite, or were in a hurry, or were shy, and simply answered the question put to them rather than offering a different name. It is true that even in a regular gubernatorial race pollsters may only offer voters a handful of candidates when there are actually a dozen on the ballot-but I believe the difference between voters' reaction to a dozen names and 135 names will be substantially different and thus the poll results may not reflect reality this time around.

The order of those 135 names is also interesting. Traditionally the candidate with top listing gets a few points bump; that is why the names are rotated. When there are only a dozen candidates, everyone gets this advantage on several versions of the ballot and it should all average out, but with 135 names, no one gets on top more than once and some never make it to that advantageous spot at all. Cruz Bustamante will appear at the top of the ballot in the 68th Assembly District, a Republican area of Orange County, which probably lessens the impact of the first-place advantage. Arnold Schwarzenegger appears first in the 74th Assembly District in San Diego, a heavily Republican area, which may magnify the advantage. Tom McClintock is first in the 35th, a Democrat district on the Central Coast. He will get a bump, but it may be one he had already since he is familiar to many of those voters because he represented some of the area as an Assemblyman and Senator. In the 77 other Assembly districts, the top of the ballot bump will go to candidates who have not yet waged substantial campaigns.

This is all a reminder that polling and political predictions are more art than science, and that is what makes this the biggest drama of the decade.

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/.

46. Kinetic (adj.) 1. relating to the motion of material bodies and the forces associated therewith; 2. characterized by motion; 3. supplying motive force: Congressman Darrel Issa's large financial donation was the recall's kinetic kickstart.

47. Kowtow (intr. v.) To show servile deference: Gray Davis has been criticized for kowtowing to the leftist agenda of the Democrat Legislative Caucus.

48. Laissez faire (n.) An economic doctrine that opposes governmental regulation of or interference in commerce beyond the minimum necessary for a free-enterprise system to operate according to its own economic laws; Noninterference in the affairs of others: Most of California's economic problems stem from state government policies that place huge burdens on those who create jobs; to reverse that problem the pendulum must swing toward laissez faire policies.

BOE AND LEGISLATIVE DATES

September 8-30 --- Registered voters may apply to county election officials for an absentee ballot for the October 7th statewide special election.

September 22 --- Last day to register to vote in upcoming special election.

September 24 --- BoE meets in Sacramento.

October 7 --- Special Statewide Election.

October 15 --- BOE meets in Sacramento.

NOTABLE DATES/ HISTORY

September 22, 1863 --- President Lincoln makes his Emancipation Proclamation speech

September 22, 1806 --- Lewis & Clark return to St Louis from the Pacific Northwest

September 24, 1952 --- Richard Nixon makes his

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