Nearly seven decades ago, historian Carey McWilliams labeled California’s first century of statehood “The Great Exception.” 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 granting “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 those same taxes on off-the-shelf software used by consumers and small businesses.
It’s one of the many reasons the governor and legislators should completely overhaul the state’s convoluted and counterproductive tax system, eliminating 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“fair trade” system of state-enforced liquor monopolies that was invalidated by the courts decades ago; it should be repealed. But rather than erase the law, legislators enjoy a brisk annual trade in bills – five in this session – that alter it for particular liquor interests.
Earlier this year, while decrying the state’s 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.
Then there’s Assembly Bill 1250, a union-backed measure to compel county governments to use civil-service workers rather than outside contractors to provide services. But it exempts the City and County of San Francisco, as well as a health care system in Santa Clara County. Why? Because they have the political clout to demand it.
Or consider 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 projects. It has morphed into a complex legal tool often misused to block even the most needed projects, often for reasons that have nothing to do with the environment.
Construction labor unions, for example, raise CEQA to force developers to sign “project labor agreements” or otherwise agree to use only unionized contractors.
Brown has declared CEQA reform to be “the Lord’s work,” but has been an agnostic in actually doing something about it. Instead, Brown continues the practice of giving big projects with heavyweight support – especially major sports venues – full or partial CEQA exemptions. The current session there is a proposed CEQA break for an arena in Inglewood for the Los Angeles Clippers.
Another bill would prohibit developers who run afoul of CEQA red tape from seeking project approvals via local ballot measures. Tellingly, construction unions that use CEQA as a bludgeon are prime sponsors of this 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?
Dan Walters writes on matters of statewide significance for CALmatters, a public-interest journalism venture. Go to calmatters.org/commentary.