Nearly seven decades ago, historian Carey McWilliams assessed California’s first century of statehood and labeled it “The Great Exception” for its many attributes.
The same phrase could be applied to the California Legislature, which habitually carves out great exceptions for particular interests from laws everyone else must obey.
State tax codes are riddled with loopholes that grant relief from taxes others must pay. One particularly egregious example, enacted three decades ago, exempts custom computer software purchased by big business from sales taxes while levying taxes on off-the-shelf software used by consumers and small businesses.
It’s one of the many reasons why the governor and legislators should completely overhaul the state’s convoluted and counterproductive tax system and eliminate unjustified loopholes.
Another example of the syndrome has to do with the so-called “tied-house law” that supposedly prevents monopolies in the three-tier liquor trade by separating producers, wholesalers and retailers.
The tied-house law is an anachronistic remnant of the misnamed “fair trade” system of state-enforced liquor monopolies that was invalidated by the courts many decades ago and it should be repealed. But rather than erase the law, legislators enjoy a brisk annual trade in bills – five in this session alone – that alter it for particular liquor interests.
Earlier this year, while decrying the state’s critical shortage of housing and fashioning legislation to compel local officials to expand housing construction, the Legislature and Gov. Jerry Brown extended wealthy Marin County’s relief from some housing mandates.
Still another example is Assembly Bill 1250, a union-backed measure to compel county governments to use civil-service workers, rather than outside contractors, to provide services. However, it exempts the City and County of San Francisco from its heavy-handed mandates, as well as a health care system in Santa Clara County.
Why? Because they have the political clout to demand it – unlike, say, Alpine County’s 1,110 residents.
And then there’s the California Environmental Quality Act, which Ronald Reagan signed nearly a half-century ago.
CEQA is supposed to compel state and local governments and private developers to fully assess and mitigate environmental impacts of their projects. It has morphed, however, into a complex legal tool that is used, and often misused, to block even the most benevolent and needed projects, often for reasons that have nothing to do with the environment.
Construction labor unions, for example, often raise CEQA objections to projects to force developers to sign “project labor agreements” or otherwise agree to use only unionized contractors. In the development industry, time is money and CEQA can be used to delay projects, sometimes for years, until they become financially unviable.
Brown has declared CEQA reform to be “the Lord’s work,” but has been an agnostic in actually doing something about it.
Brown has, instead, continued the recent practice of giving big projects with heavyweight support – especially major sports venues – full or partial exemptions from CEQA procedures. The current session, in fact, has still another proposed CEQA break for a proposed arena in Inglewood for the Los Angeles Clippers, which were recently purchased by Steve Ballmer, the billionaire former Microsoft CEO.
Meanwhile, another bill would prohibit developers who run afoul of CEQA red tape from seeking project approvals via local ballot measures, as many have done. Tellingly, construction unions that use CEQA as a bludgeon are prime sponsors of the bill.
It’s another indication that instead of fiddling with CEQA, and probably making it worse, Brown and the Legislature should overhaul it. If, as Brown says, it is truly “the Lord’s work,” then why aren’t they doing it?