Frank's Rants

No Good Deed Goes Unpunished…

Volume 1, Number 21

As the title of Frank’s Weekly Rant suggests, I have a lot of things to complain about, but this week’s subject takes the cake.

You’d think that when people give of themselves and their financial resources to help people in need, the state would be happy. You’d be wrong.

Many families in California who have been blessed with great wealth have created foundations to share their good fortune with those less fortunate. These include the William and Flora Hewlett Foundation, the David and Lucille Packard Foundation, the Ahmanson Foundation, the Annenberg Foundation, the James Irvine Foundation, the Koret Foundation and the Weingarten Foundation. The founders of all of these foundations could have decided to pocket their financial largess and keep it for themselves, but instead they have given billions of dollars to charitable causes in our state. Each foundation has different priorities, but all have a common aim: to make our communities and state a better place to live and to help people in need. Some focus on the environment, others on health care, still others on education, helping families, ending poverty, etc. They are all good causes.

And for their good deeds, the state wants to punish them.

Assemblyman Joe Coto has authored AB 624 to attempt to force large foundations to give more money to minority organizations in California. It’s based on a baloney study conducted by the liberal Greenlining Institute in Berkeley that found that the 50 largest foundations gave only 3% of their grants to minority groups. As a first step to attacking that supposed problem, Coto’s legislation would require foundations with more than $250 million in assets to report to the state the racial makeup of their boards of directors and staff; the number and amount of grants made to minority groups, homosexual groups, disabled organizations and other “underrepresented communities;” the number and amount of grants to groups whose board or staff is comprised of least 50% minorities; and the number and amount of grants awarded to predominantly low-income communities.  The legislation passed the state Assembly on a vote of 45-29. Not a single Republican voted for the bill, nor did a single Democrat have the courage to vote No.

This may be the single dumbest, most misguided piece of legislation I have ever seen in my 30 years in politics. Former University of California President Richard Atkinson called it, “an intrusive attempt to redirect the distribution of charitable dollars away from legitimate nonprofits" to others "anointed as more 'worthy' by the state" I couldn’t agree with him more.

What possible business is it of the State of California to tell a private foundation what groups they should support? Is the state now going to be directing which groups are favored and entitled to support, and discourage contributions to disfavored groups? It appears that it’s not enough for majority Democrats to be able to spend the $115 billion state budget on their priorities – they now want to be able to direct spending by private parties as well.

Yesterday the Sacramento Bee reported that a coalition of foundations has reached a voluntary agreement with Assemblyman Coto and the Greenlining Institute to develop a multi-million, multi-year plan to invest in minority communities. In exchange, Assemblyman Coto has agreed to drop his legislation.

I don’t blame the foundations for this agreement. The Coto legislation had already passed the Assembly and no doubt would have passed the Senate. Since nobody anymore can rely on Governor Schwarzenegger to do the right thing and veto bad legislation, the foundations probably rightly decided to cut their losses. Furthermore, they almost certainly already give far more to minority communities than would be called for by this agreement.

However, this episode is a sorry example of how far off track California’s legislature has gotten. Their actions discourage philanthropy and charitable giving. It will reduce enthusiasm to help people in need. It encourages the wealthy to keep their funds to themselves rather than donate to charitable foundations and be subjected to state action for not giving to favored groups.

Public support for the legislature is at an all time low. AB 624 is an example of why that is the case.

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I was on a panel yesterday of campaign experts at a conference hosted by the American Association of Political Consultants. Josh Howard of Capitol Weekly asked Chris Lehane, a former White House advisor to President Clinton, about the first piece of advice a consultant should give a client who was faced with a crisis. Chris made the point that it depended on the facts and whether it was a campaign crisis or a crisis while governing, and then went on to give a fine answer to the question. I couldn’t help but chuckle and wanted to grab the microphone when I heard the question. I would have answered, “If the crisis is in the White House my first piece of advice would be to get the dress dry cleaned.”

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How To Stop Gasoline Profiteering

Volume 1, Number 20

I paid $4.76 a gallon for premium gasoline this morning, and I have concluded it is time to stop gasoline profiteering. President Bush unveiled a plan today to boost oil production and refinery capacity, which is certainly needed over the long term. But my plan will reduce the cost of gasoline by as much as 15%. And it can take effect almost immediately.

My plan is to provide a “tax holiday” on gasoline purchases. The state and federal government are the biggest profiteers in the current gasoline crisis. The federal government charges consumers 18 cents per gallon. The state makes 18.4 cents per gallon and also charges consumers a 7.75% sales tax on every gallon of gasoline sold in California. Whenever the price of gas rises, California state government makes more money. They have no overhead, they invest nothing to produce oil, they refine nothing, they distribute nothing – yet they make far more than any oil company whenever a gallon of gas is sold.  According to the American Petroleum Institute, the average oil company earnings are 7.4%. In contrast, by my calculations, the state of California earns about 11% on a gallon of gas at current prices, while the federal government makes about 4%.

If you were to ask California voters how they feel about a 15% reduction in the price of gasoline, I imagine it would poll in the 90% range.  If you were to ask California politicians what they think of the idea, they will hate it.  Politicians will look at this idea as cutting revenues for their programs. They don’t get that they are profiteering at the expense of cash-strapped consumers.

Now I fully recognize there are many important programs that are funded by gas tax revenues. Many of my friends in the business community understandably fight hard to protect funding for these programs, particularly transportation. I am not proposing that these programs permanently lose gas tax funding. However, giving consumers a break in gas prices for a few months by eliminating taxes isn’t going to kill any of these programs. Even if we were to reduce taxes to the point they were before gas prices spiked would maintain a reasonable funding base while eliminating the profiteering that the state and federal governments have engaged in over the past year.
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Tiger Woods won the U.S. Open on Monday in a dramatic 19-hole playoff against one of the game’s most popular players, Rocco Mediate. He did so on a bum knee after missing two full months recovering from arthroscopic knee surgery. Now comes word that Woods’ injury was far more serious than he let on. He played in the event against the advice of his doctors, who advised him that he should undergo reconstructive ACL surgery to correct ligament damage. And his preparation for the event resulted in stress fractures to his left tibia. Unbelievable. The guy wins arguably the most difficult golf tournament in the world with a torn ligament and fractured leg. He has only played seven professional events in 2008, and he won five of them. (He finished second in the Masters and fifth in the WGC CA Championship.) Now he is out for the year to undergo the recommended ACL surgery, and let his stress fractures heal.

Golf fans can only hope that the surgery goes well and that Tiger will be back at full strength for the 2009 season. The greatest golfer to ever have played the game, only injuries can derail his path to capturing every meaningful record in professional golf, including besting Jack Nicklaus’ record of winning 18 major championships and Sam Snead’s record of 82 professional victories. Nicklaus won his last major at age 46. Woods has 65 professional tournament victories including 14 major championships, and he is just 33 years old.

This is the fourth surgery that Tiger will have undergone on his left knee. That, obviously, is of major concern.

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Al Gore endorsed Barack Obama yesterday. Wow, that was a courageous move. Way to step up, Al.

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“It’s hit, deep to left field…”

Volume 1, Number 19

It’s baseball season so I serve up this analogy: Assembly Democrats have hung a curve ball and the Republicans have hit it deep to left, on its way out of the park.

Late last week the State Assembly passed legislation to impose a 25 cent per bag tax on all grocery bags used in California. They call it a fee, but explain that subtlety to consumers. This was a surprisingly stupid move given the historic highs of food prices. Wheat bread now costs $4.39 a loaf. A carton of eggs will set a single mom back $3.60. A gallon of milk costs a struggling family $4.50. I paid $4.66 a gallon today for gasoline.

Despite the struggling economy, unprecedented food prices and continually rising price of gasoline, Assembly Democrats cannot seemingly help themselves when it comes to passing legislation that is said to be good for the environment. This particular bill, AB 2058 by Assemblyman Lloyd Levine is said to encourage the recycling of plastic bags. It enacts a complicated and convoluted system that retailers must follow in order to avoid charging the bag tax. Among other things, stores must recycle at least 70% of their plastic bags to avoid charging the tax. Well, first of all, how does a store even know how many plastic bags it uses? Are we going to install little “bag counters” at the checkout stand to measure compliance? And who will be monitoring the accuracy of the bag counters to make sure there is no tampering occurring? Let’s hire hundreds of bag counting inspectors, make them SEIU members, and send them out to grocery stores all over California to make sure this new system works. Oh, one more thing. The supposed aim of the legislation is to increase recycling of plastic bags, but the measure applies to paper bags as well. This leads one to conclude that a primary purpose is to tax consumers to generate more money for the state. (There are apparently 19 billion plastic bags used by Californians every year.) It’s one thing, politically, to propose to tax “big oil” or “big tobacco” but when Democrats propose to tax grocery consumers at a time when food prices are sky high, that is an incredibly stupid thing to do. Even Republicans won’t miss this opportunity to punish them in the fall campaign.

I can’t help think that the passage of this legislation was designed to help Levine in his hard-fought primary election battle against former Assemblywoman Fran Pavely. If that was the point, it failed since Levine was soundly trounced by Pavley by a 2:1 margin. It now falls to Senator Don Perata to stuff this bag tax in the trash bin before Republicans can make more political hay out of it.

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So Scott McClellan is out with a book ripping the Bush Administration over its handling of the war. I haven’t read it and I have no idea whether what he alleges is true or not. However, one issue that has emerged is the role of the press secretary and whether this person is in an inside position of knowledge in an administration. In my experience, while the press secretary is a critical person and certainly is privy to many facets of an administration, the person in this position is rarely involved in sensitive high level policy or political discussions. There is a good reason for this. If the press secretary has inside knowledge about an administration’s plans, and then is asked about it by the media, he must either plead ‘no comment,’ spill the beans, or lie. None of those responses are helpful to the cause. If he isn’t informed, he can tell the media honestly, “I don’t know.” This is why I almost never talk to the media during a hotly contested initiative campaign. I would much rather have a press secretary handle those chores. First, if the media thinks they can talk directly to the campaign manager, they will always want to talk to me and not the press secretary. Second, the press secretary can honestly avoid discussion of subjects about which she or he is not informed. If the media asks me, for example, how much money we are going to spend on an ad buy, I have to tell them, “I’m not going to say.” That sort of response doesn’t make the campaign look very good in print.

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Well, the primary elections have come and gone, so let’s revisit some past subjects of my Rant:
• Obama has clinched the nomination and apparently avoided a floor fight over delegates. But he isn’t out of the woods yet. Hillary Clinton is actively lobbying for the Vice Presidential spot. You can bet your first born that she will put up a fierce internal fight to force Obama, to whom she now refers as “my friend,” to choose her. She may well succeed., even thought Obama surely must hate her by now. Isn’t this delicious?!
• Kevin Johnson has nearly knocked the inept Sacramento Mayor, Heather Fargo, out of office. Returns thus far show him with almost 47% of the vote, with her just shy of 40%. With nearly 16,000 votes yet to be counted, it’s possible that he may eke out a 50% margin and win the race outright. Even if it goes to a runoff, however, I’ll take bets that Fargo is finished. And she should be since her accomplishments in office are invisible. Let’s hope that the next Mayor will be a dynamic, visionary, can-do person who harnesses the vast potential of Sacramento’s downtown area and transforms the central city. Think Austin, San Antonio and Portland and you’ll understand what Sacramento has not been able to accomplish because of lack of Mayoral leadership.
• Tom McClintock has soundly beaten Doug Ose for the GOP nomination in the 4th Congressional District, my home area. I supported Ose, but offer my congratulations to Tom. Whatever differences I have with him pale in comparison to the differences I have with the Democrat nominee, Charlie “Good Grief” Brown. McClintock should win handily in November and enjoy the support of most of Ose’s backers, including me.

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