April 9, 2009 Meeting Transcript

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April 9, 2009 Meeting Transcript STATE OF CALIFORNIA COMMISSION ON THE 21st CENTURY ECONOMY YZ STATE OF CALIFORNIA REVENUE & TAXATION FUNDAMENTAL TAX ALTERNATIVES XW PUBLIC MEETING Thursday, April 9, 2009 9:07 a.m. – 5:03 p.m. University of California, Davis Walter A. Buehler Alumni & Visitors Center Mrak Hall Drive Davis, California XW Reported by: Daniel P. Feldhaus Certified Shorthand Reporter #6949 Registered Diplomate Reporter, Certified Realtime Reporter Daniel P. Feldhaus, C.S.R., Inc. Certified Shorthand Reporters 8414 Yermo Way, Sacramento, California 95828 Telephone 916.682.9482 Fax 916.688.0723 [email protected] 1 st Commission on the 21 Century Economy – April 9, 2009 A P P E A R A N C E S COMMISSION ON THE 21ST CENTURY ECONOMY Commissioners Present GERRY PARSKY Commission Chair Aurora Capital Group RUBEN BARRALES President/CEO San Diego Regional Chamber of Commerce MICHAEL BOSKIN Professor Stanford University JOHN COGAN Professor Stanford University EDWARD DE LA ROSA Founder and President Edward J. De La Rosa & Company, Inc. CHRISTOPHER EDLEY, JR. Dean/Professor of Law Boalt Hall School of Law GEORGE HALVORSON Chairman/CEO Kaiser Foundation WILLIAM HAUCK Trustee, California State University Director Blue Shield of California & Blue Shield Foundation JENNIFER ITO Research, Training, Policy Director SCOPE FRED KEELEY Treasurer, County of Santa Cruz Professor, San José State University Daniel P. Feldhaus, CSR, Inc. 916.682.9482 2 st Commission on the 21 Century Economy – April 9, 2009 A P P E A R A N C E S COMMISSION ON THE 21ST CENTURY ECONOMY Commissioners Present continued MONICA LOZANO Publisher/CEO La Opinión REBECCA MORGAN President Morgan Family Foundation RICHARD POMP Alva P. Loiselle Professor of Law University of Connecticut CURT PRINGLE Mayor City of Anaheim ---o0o--- COTCE Staff Present MICHAEL C. GENEST Commission Executive Director Director of Finance MARK IBELE Commission Staff Director Board of Equalization ASHLEY SNEE GIOVANNETTONE LORI HSU ANTONIO LOCKETT JESSICA MAR MICHELLE QUINN Staff Writer Daniel P. Feldhaus, CSR, Inc. 916.682.9482 3 st Commission on the 21 Century Economy – April 9, 2009 A P P E A R A N C E S COTCE Staff Present continued PHIL SPILBERG Chief, Financial Research Department of Finance MARGIE RAMIREZ WALKER ---o0o--- Public Testimony CHRIS NORBY Southern California Association of Governments (SCAG) PETER BRANDENBURG Southern California Association of Governments (SCAG) ---o0o--- Presenters STEVEN B. FRATES Senior Fellow Rose Institute of State and Local Government President, The Center for Government Analysis LENNY GOLDBERG Executive Director California Tax Reform Association WILLIAM HAMM Managing Director LECG ROBERT S. MCINTYRE Director Citizens for Tax Justice RICHARD S. MOON Tax Counsel IV Legal Department California Board of Equalization Daniel P. Feldhaus, CSR, Inc. 916.682.9482 4 st Commission on the 21 Century Economy – April 9, 2009 A P P E A R A N C E S Presenters Continued ROBERT P. MURPHY Senior Fellow in Business and Economic Studies Pacific Research Institute TERRI A. SEXTON Professor, Department of Economics California State University, Sacramento RICHARD G. SIMS Chief Economist National Education Association LARRY E. STONE Assessor County of Santa Clara ---o0o--- Daniel P. Feldhaus, CSR, Inc. 916.682.9482 5 st Commission on the 21 Century Economy – April 9, 2009 Table of Contents Item Page Welcome and Introductions Chair Parsky ............................ 9 Public Comment Chris Norby Southern California Association of Governments (SCAG) ........................ 11 Peter Brandenburg Southern California Association of Governments (SCAG) ........................ 18 Commissioner Comments ......................... 33 Structural Reform and Economic Growth Robert Murphy Senior Fellow Business and Economic Studies Pacific Research Institute ................ 54 Robert McIntyre Director Citizens for Tax Justice ................ 81 Taxes, Education, and Development Richard Sims Chief Economist National Education Association ............ 120 Daniel P. Feldhaus, CSR, Inc. 916.682.9482 6 st Commission on the 21 Century Economy – April 9, 2009 Table of Contents Item Page Property Tax Options – Administrative and Legal Issues Larry E. Stone Assessor County of Santa Clara ...................... 148 Richard Moon Tax Counsel IV California Board of Equalization .......... 167 Property Tax Options – Economic Issues Lenny Goldberg Executive Director California Tax Reform Association .......... 194 William Hamm Managing Director LECG ............................ 203 Steven Frates Senior Fellow Rose Institute of State and Local Government 216 Terri Sexton Professor, Department of Economics California State University, Sacramento ... 223 Tax Options and Alternatives Mark Ibele Commission Staff Director Board of Equalization ..................... 247 Phil Spilberg Chief, Financial Research Department of Finance ..................... 256 Daniel P. Feldhaus, CSR, Inc. 916.682.9482 7 st Commission on the 21 Century Economy – April 9, 2009 Table of Contents Item Page Commission Discussion of Options and Next Steps . 258 Adjournment .................................. 302 Reporter’s Certificate ......................... 303 --o0o-- Daniel P. Feldhaus, CSR, Inc. 916.682.9482 8 st Commission on the 21 Century Economy – April 9, 2009 1 BE IT REMEMBERED that on Thursday, April 9, 2 2009, commencing at the hour of 9:07 a.m., at the 3 University of California, Davis, Walter A. Buehler 4 Alumni & Visitors Center, Mrak Hall Drive, Davis, 5 California, before me, DANIEL P. FELDHAUS, CSR 6949, 6 RDR, CRR, in the state of California, the following 7 proceedings were held: 8 --o0o—- 9 (The meeting commenced with Commissioner 10 Boskin and Commissioner Cogan absent from 11 the meeting room.) 12 CHAIR PARSKY: I want to welcome everyone to 13 the meeting of the Commission on the 21st Century Economy. 14 We’ve had public sessions at UCLA, at Berkeley, at 15 UC San Diego. And we are delighted to be here at 16 UC Davis; and we want to thank all of the UC Davis 17 community for welcoming us. 18 The UC system has been terrific at making 19 facilities available, and a number of the members of the 20 UC family have contacted me and said that they’re counting 21 on the work of this commission in being some assistance 22 to them in these difficult times. We’ll have to see how 23 our recommendations come out. 24 Just one announcement that I would make and 25 then we’ll turn to our public comments, and then ask Daniel P. Feldhaus, CSR, Inc. 916.682.9482 9 st Commission on the 21 Century Economy – April 9, 2009 1 commissioners to comment. 2 At the last meeting, all of the commissioners 3 requested that we seek an extension of the time frame for 4 giving our report, which I did, of the Governor and the 5 legislative leaders. And they all understood exactly why 6 we wanted such an extension. And we’ve been given until 7 the end of July to make our recommendations. As a result, 8 we’re going to have a public meeting in June, in 9 Los Angeles again, on the 16th of June. And we will use 10 the approximately two-month period to do an extensive 11 amount of staff work if we can end today and a few days 12 after today, giving the staff appropriate directions. 13 And then we will come back together and look at some of 14 the work that the staff has done and refine it further. 15 And then we have tentatively reserved -- I 16 wanted to be sure that all Commission members could 17 attend -- I did get a “yes” from all commissioners in the 18 June meeting. 19 I was able to get all but one. I’ll leave the 20 person that is not quite available in suspense. But in 21 July, I think it’s July 17 was the date that everyone said 22 “yes” to, except one. So I have to work with that person 23 to see if we can get everyone there. But I’d like to 24 really see where we are in June before we finalize it. 25 But put a pencil on July 17. And that one would be in Daniel P. Feldhaus, CSR, Inc. 916.682.9482 10 st Commission on the 21 Century Economy – April 9, 2009 1 Sacramento. 2 Okay, let’s turn to the public comments, then 3 I’ll make a few comments before I turn to any 4 commissioners who would like to speak. 5 I think we have one speaker, Chris Norby is 6 here. And Chris, as many of you know, is part of the 7 Board of Supervisors for Orange County. And he has asked 8 for a little extra time, and we’re happy to provide it to 9 him. As the only public speaker, we have the discretion 10 to extend the comment period. 11 So, Chris, please go ahead. 12 MR. NORBY: Thank you, Mr. Chairman. 13 My name is Chris Norby. I’m a resident of the 14 City of Fullerton. My public experience includes 18 years 15 on the Fullerton City Council, including three years as 16 mayor. And for the last six years, I’ve been a member of 17 the Orange County Board of Supervisors, representing the 18 cities of Fullerton, Anaheim, La Habra, Placentia, and 19 Buena Park. 20 As a supervisor and as the county’s 21 representative on the Southern California Association of 22 Governments, I’m also serving currently as the vice-chair 23 for SCAG’s Fiscalization of Land Use Committee, to look 24 for solutions which would lead to more fair and balanced 25 revenue, and also a defiscalization of land use, to Daniel P. Feldhaus, CSR, Inc. 916.682.9482 11 st Commission on the 21 Century Economy – April 9, 2009 1 encourage cities to have more balanced land use. 2 The term “fiscalization of land use” means that 3 cities are looking and are zoning specifically only for 4 those uses which will maximize revenue. And because of 5 the extreme reliance on site-based sales tax, cities have 6 exhibited an extreme prejudice in favor of commercial uses 7 because they want the sales tax.
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