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CA's Liberal Government Has a Long History of Caving to Special Interests
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By Dan Walters, CalMatters Commentary
Published 4 weeks ago on
March 27, 2024

California's liberal government has a tendency to yield to special interests, impacting the state's taxation, appropriation, and regulation. (CalMatters/Rahul Lal)

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A good, albeit brief, definition of liberal government is one that employs its powers of taxation, appropriation and regulation to improve the lives of its constituents.

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Dan Walters

CalMatters

Opinion

By that definition, California is one of the nation’s most liberal states. Annually, its governors and legislators enact hundreds of measures that purport to generate more prosperity and equity for its nearly 39 million residents.

Whether those efforts have had an overall positive effect – which is debatable – they unquestionably have a darker side. Each tax, each appropriation and each regulatory action has a financial impact, thus motivating those affected to seek favorable treatment.

The Coastal Commission Example and Many More

A classic example is the California Coastal Commission, created by voters more than a half-century ago with the stated goal of maintaining public access to beaches and other coastal property by regulating development. The commission holds immense authority within a 1.6 million-acre “coastal zone” that runs from Oregon to Mexico, superseding the land use powers of local governments.

From the onset, the commission has been besieged by lobbyists for and against specific projects, and its actions have often been tinged by scandal. Three decades ago commission member Mark Nathanson, a Beverly Hills real estate broker, pleaded guilty to soliciting almost $1 million from Hollywood entertainment barons seeking building permits.

During the early years of its existence, meanwhile, the Legislature saw numerous attempts to revise the coastal zone’s dimensions because land outside its borders became more valuable. One state senator even carried a bill removing his own family’s business from the zone.

Another hoary example is California’s “tied house law” that supposedly battles monopolies in the liquor business by making it illegal for someone in the production, distribution, or retail levels to engage in more than one.

The law has long outlived whatever rationale it once had and should have been repealed, but it remains on the books and thus generates a brisk trade in legislation to carve out exemptions for particular businesses.

Still another: If a Californian buys some off-the-shelf computer software – such as the TurboTax, for example – sales tax is added. But three-plus decades ago, the Legislature bowed to pressure from Silicon Valley and exempted custom software, which can cost millions of dollars, from taxation.

One more: Every year, the state allocates millions of dollars to the Southern California film industry for production inside the state. Why should California taxpayers subsidize them and not other businesses? Film executives, actors and their unions bedazzle politicians.

The California Environmental Quality Act is blatantly misused to block much-needed housing development and cries out for reform. The Legislature has taken some baby steps but routinely helps big projects such as sports arenas minimize CEQA’s effect.

Picking Winners and Losers

A few years ago, the Legislature passed Assembly Bill 5, which requires millions of Californians who do contract work to be converted into payroll employees, but only after exempting certain categories chosen by legislative leaders.

Something of that nature happened again this week when Gov. Gavin Newsom signed Assembly Bill 610, which exempts certain restaurant employees from the state’s new $20 minimum wage for fast food workers. They include workers in hotels, theme parks, concessions on public property, and gambling casinos.

Earlier, there had been a flap over an exemption for workers in restaurants that bake and sell bread. It appeared to benefit Panera Bread, one of whose franchise holders had been a major political contributor to Newsom. The controversy died down when Panera agreed to abide by the law.

AB 610 arbitrarily improves the bottom line for some restaurants while others will soon see their labor costs escalate. Politicians once again choose winners and losers.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times. CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more columns by Dan Walters, go to calmatters.org/commentary.

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