Election 18- The Numbers Behind California’s Numbers
When all is said and done, and with recounts and slow counts all is not yet said and done, it looks like the Democrats will have flipped 37-40 House Districts from Republican to Democrat, and the Republicans will have retained control of the Senate by anywhere from the current 51-49 margin to as high as a 53-47 margin should the Republicans win a runoff in Mississippi and survive a recount in Florida.
As for California, the Democrats have captured the 2/3 control of the legislature necessary to pass tax legislation with nary a Republican vote and have captured all statewide offices, albeit Independent Steve Poizner did come within a whisker of defeating his Democratic opponent Ricardo Lara.
So much for the raw numbers. The more interesting discussion is whether there is anything behind the numbers that you should take note of – anything with direct or even indirect impact upon the California golf industry. There were five – two involving the voters’ verdict on statewide initiatives, one involving the verdict of the voters of the state’s most populous county, one involving the verdict of one of the state’s urban bastions regarding wage issues, and one involving comments issued by Governor Elect Newsom. Four of them tell us something about where the state may be headed with respect to taxes and one tells us where even a conservative city is headed with respect to minimum wages.
It’s hard to interpret the electorate’s overwhelming rejection of Propositions 5 and 6 as anything other than a statement from the state’s voters that they are willing to tax themselves to accomplish collective needs. Given an opportunity to save 12 cents for each gallon of gasoline purchased, the voters rejected that “opportunity” in favor of fixing the roads. Given an opportunity to vote themselves a significant property tax benefit post age 55, the voters chose to keep those dollars in the hands of local government at expense to themselves.
It’s hard to interpret Los Angeles County’s 67.48% approval of Measure “W” as anything other than a reflection of the same propensity. Measure “W” taxes that portion of a residential or commercial property that is impermeable surface to create an infrastructure capable of capturing and treating storm water for discharge and replenishment. More than 25% of the state’s population lives in Los Angeles County, a sizable sample for surveying attitudes toward self-assessment to accomplish public ends. A sizable sample indicative as well of the high priority ordinary Californians now place on the need to create alternative water supplies, a propensity to which the golf industry should pay great heed.
It’s hard to interpret the Anaheim electorate’s decision to slap a $15 “living” wage on the city’s entertainment sector as anything other than a powerful indicator of the support minimum wage increases have even in the state’s more conservative enclaves. Expecting lesser support in most of the state’s larger cities is expecting something that just isn’t in the cards.
Since his election to the state’s highest office Gavin Newsom has made repeated reference to the need to address the volatility built into the state’s tax structure by over-reliance upon the capital gains of a shockingly small number of California residents, many of whom labor in a tech sector that common wisdom assumes is about to enter a cooling off period. He has hardly disguised the fact that he sees a systemic reform that would take pressure off high marginal income tax rates and overly high and regressive sales tax rates as the answer. And all roads of that discussion lead to the creation of a service tax. “Discussion” won’t lead to action until the next recession makes clear just how fast the state will plow through the $10 billion rainy day fund that Jerry Brown created. We are now in the longest recovery in American history; how far off can that next recession be?
A year is an eternity in politics. But smart money would be on bracing ourselves for an onslaught of more taxes, fees and wage increases in the short run and in the somewhat longer run perhaps a tax “reform” that adds California to the 23 states that tax golf.
A challenge, yes. An insurmountable challenge, certainly not.