10 September 2014
We are proud to announce an important legislative milestone for the Berggruen Institute and Think Long for California, Inc. in the legislature last week.
The California Senate approved a measure to strengthen the ballot initiative process with bipartisan support in both the Senate and the Assembly. The Ballot Initiative Transparency Act, SB-1253 authored by Senate Leader Darrell Steinberg, will increase public participation during the initiative process and provide greater information to voters on proposed initiatives. The measure passed the Senate on a 28 to 9 vote and now heads to the Governor for his consideration.
In its "Blueprint to Renew California", the Think Long Committee (TLC) made a series of recommendations to improve and curb the abuses of California's prodigious initiative process (adopted a century ago from the Swiss system of popular initiatives, albeit with several consequential changes), which is badly in need of reform.
Over the last year, under the close guidance of former Chief Justice Ron George and former Speaker of the House Robert Hertzberg, a coalition of over 60 business, labor, tax, civil rights and civic reform groups came together to craft a far-reaching initiative reform for California.
Initially designed as an initiative itself, TLC chose instead to pursue the reforms through legislation, rather than going directly to the voters. The reforms are now in Senate Bill 1253 (the Ballot Measure Transparency Act).
The Ballot Measure Transparency Act looks at several steps to improve California's initiative process:
The bill now heads to Governor Jerry Brown’s desk for approval.
Note: Think Long for California, Inc. was created as a separate 501(c)(4) in 2014 to implement the recommendations of the Think Long Committee for California, a bipartisan panel which convened in 2011 and put forth its Blueprint to Renew California to address the state's governance crisis.
29 July 2014
In 2010 the Berggruen Institute on Governance founded the Think Long Committee for California, a high-powered group of eminent citizens with broad experience in public affairs, labor, and business.
The name of the group itself implied its main objective: to introduce a depoliticized, non-partisan and long-term agenda as a corrective to the partisan rancor and short-term, special interest political culture that has come to dominate California political life.
After deliberating a year in monthly sessions, the group released its "Blueprint to Renew California" in 2011 - a bipartisan plan to renew California's dysfunctional democracy.
As the work has transitioned from developing solutions to advocating for change the work of the Think Long Committee now falls under a newly formed 501(c)(4).
19 August 2013
by Nathan Gardels
Unless the state modernizes its obsolete tax code, as the Think Long Committee has recommended, California could be right back where it started from with billion dollar annual deficits.
In order to balance the budget, Governor Jerry Brown cut spending over the past two years (the General Fund Budget is down to $97 billion this year from $127 billion when Arnold Schwarzenegger was governor). He then also convinced the public to approve a tax increase on the wealthy, with a temporary tax hike on those making over $250,000 per year.
As a result, California is back in fiscal balance -- but totally reliant on income and capital gains taxes on the state's richest citizens. At this point, the top 1 percent pay 50 percent of income taxes in California.
As America as a whole, California included, drifts toward plutocracy and growing inequality, there is certainly a logic in this. But it is unsustainable. Just to start with, the Silicon Valley tech industry -- where so much of the wealth the state depends on is concentrated -- is already starting to slow down. Tax revenues will follow any slump at an accelerated pace.
The only sustainable course for the long term is to broaden the tax base to include a sales tax on services. California has a $2 trillion dollar economy. Half of it is information and services, yet is not taxed. If you buy a donut in a coffee shop, you pay a sales tax. If you buy a legal, financial, accounting or entertainment service, you are not taxed.
A recent report from the California Legislative Analysts Office (LAO) underlines the volatility and fragility of relying on a narrow income tax base to the exclusion of a tax on services. In recent years, state revenue from the sales tax on goods has dropped. That is because consumer purchases of goods have dropped from 53 cents of every dollar to 33 cents. Services today are more expensive and a larger part of a person's budget.
The Think Long Committee recommendation would raise a 1-3 cent sales tax on services (excluding health care) while trimming the income tax on all income categories while maintaining California's progressive tax structure. This would raise $10 billion in new revenues annually for localities, K-12 and higher education for the community colleges, CalState and the University of California.
Governor Brown's tax hike is temporary and will expire during his next term. (Everyone expects him to win the next election). The Think Long Committee will renew its efforts to change the tax code by broadening the base and lowering rates as the Governor's plan winds down.
Below is a report in Bloomberg News that notes the Think Long plan, a column by Dan Walters on the problem with California current tax code, and the LAO report on falling revenues from the sales tax on goods.
- Arun Maira
Los Angeles Times
- Patt Morrison
- James Nash & Michael B. Marois
Los Angeles Times
- George Skelton
New York Times
- Adam Nagourney
Fox Business News
- Elka Worner
- James Fallows
- James Nash
Fox Business News
- Elka Worner
U-T San Diego
- Nathan Gardels
- Nicolas Berggruen and Nathan Gardelsview all