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Monday, February 8, 2010

Use Your Initiative

Last week I wrote about what I feel could go down as the dumbest piece of legislation in the nascent decade, State Senator Alan Lowenthal's bill to eliminate free parking in our cities and state. After the significant blowback in Long Beach media from citizens who agree that the idea is dumb, Lowenthal tried to back track saying the legislation was misrepresented in the media. Even though the media used his statements, evidently his statements were misleading. At this point the bill has passed through the Senate on a straight party line vote and is already on its way to possibly becoming law as it will head to the Democratic controlled Assembly.

Not to be outdone by her former co-council member on the Long Beach City Council, State Senator Jenny Oropeza has put forth her own bill that could qualify for the dumbest legislation award except her timing was bad. Oropeza's bill if passed will stop retailers from charging surcharges to customers who use debit cards to pay for their purchases. Naturally the veil she hides behind is "helping the poor" who are unfairly hurt by the fees retailers charge all debit card users, not knowing if the user is rich or poor.

Let's follow the bouncing ball and see where it lands. The Federal government spends hundreds of billions to infuse capital on banks balance sheets, also known as a bailout. The biggest banks have repaid their loans with interest and dividends. The feds also buy a car company or two with the same funds. Those funds have not been repaid. With the money being repaid by the banks the Administration shoves to other government entities as "stimulus" but is more akin to "subsidies."

Now the Administration and the majority in Congress want to charge fees to banks to repay the funds most have already repaid. They have worked up a ten year repayment schedule and expect the fees to come out of bank profits, but in reality will come from bank customers. Some of those customers are businesses, such as retail stores.

Retail stores, and other businesses, price their goods and services using a combination of costs and market supply and demand. Small stores may differentiate between customers who pay with cash and those who pay with debit cards, or even credit cards, which cost them more as a business due to bank fees.

The government raises fees for banks, they raise fees for customers, customers that are businesses raise costs on the goods and services they sell, consumers pay more as the costs are passed down the line.

If Oropeza's bill becomes law then retail stores will not be able to pass the fee associated with a specific type of transaction, a debit card purchase, to the person generating the fee. So instead of just the customers who generate the fee paying the costs prices will go up throughout the store and all customers will pay the fee. Somehow in the minds of Oropeza and others who support this bill see taxing every customer in the store for the actions of some of the customers is equitable. These are the same people who think not allowing businesses to pay for parking for their customers and employees somehow does not get passed down to them anyway through higher prices or lower compensation.

A classic model of how well the pay as you go, or pay as you pay, model is AM/PM. In our region the are almost always the lowest price gasoline I see driving around. When you buy gas at AM/PM however they have a forty-five cent surcharge if you are using a debit card to pay for your gas (they do not take credit cards). The gas for cash buyers is cheaper than non-cash buyers because AM/PM passes along their bank fee, and the convenience fee, to customers who choose to pay that way. At Mobil or Exxon everyone pays the fee whether paying with cash or card as their gas prices are higher. Under Oropeza's bill AM/PM would lose its niche market and its prices for all customers would rise.

Our State Legislature meddles in our daily lives consistently. Year after year thousands of bills are sent out of the Legislature to the Governor's desk. Thankfully our current Governor, Arnold Schwarzenegger, has vetoed many--but not where near enough, including the final budgets each year of his tenure. Imagine a Democratic controlled Legislature with a Democratic Governor like Jerry Brown and the bills that will become law? Free parking? Debit cards? They would just be the beginning.

Our state has the initiative process whereby the Legislature can be by-passed and measures can be put directly to voters. Unfortunately this process has been abused by the Legislature putting measures on the ballot the last decade that have exploded the debt and spending requirements of the state as we pay for things like stem cell research and high speed rail; this year another couple of billion dollars in bonds is on the ballot for water. But sometimes the citizens put something on the ballot that can bring positive change to the state and lead to long term stability, Proposition 13 comes to mind which has saved millions of homes from having to be lost or sold due to raising property taxes.

Right now there are three initiatives that have been put forth by citizens of California that aim to bring some sense and reason to our state political environment.

The first initiative is from Citizens For California Reform. If passed this initiative would eliminate the full time Legislature in California and create a part-time legislature. California has by far the highest paid legislature, and the biggest budget deficits. Our current model is broken and is based on a corrupt circle of donations and contracts between our elected officials and public employees. Reduce the time the legislators spend in Sacramento and we reduce the amount of ridiculous bills and laws that burden our state and resources.

Next up is an initiative from The Citizen Power Campaign. This initiative is quiet simple and if on the ballot will face unprecedented opposition from every labor union in the state, which tells you how much it is needed. If it becomes law the initiative will ban public entities in California from collecting PAC dues for public employee unions through payroll deductions. Tremendous public dollars and resources are spent to collect, account for and distribute these funds which are then used for strictly political purposes. It is critical to the ability of the public employees unions to buy their elected representatives who then vote on their contracts, benefits and number of employees.

The third initiative that is trying to get on the ballot is the Vote Safe Now initiative. This initiative is very simple, it requires all voters to show identification at the polling place, ensure California residents serving in the military have their votes counted, and finally that election officials verify voters' signatures and identification on all absentee ballots. Our most precious right is the right to vote, but it is unprotected in California to ensure that each ballot is lawfully caste.

I ask that you visit each of the websites and sign petitions to put these initiatives on the ballot. Let the electorate decide the merits of these initiatives to rein in government, rein in special interest and rein in fraudulent ballots and elections.

Too often I receive emails or have conversations with people fed up with the politics in California, and too often they write or say something along the lines of, "oh well there is nothing we can do about it...." Bunk. There is something we can do about it, but it requires that we, you and I, actually do something about it! If you want to change California politics then sign the petitions for these initiatives so they can be on our ballots, pass the petitions around your neighborhood and place of business.

Do something. Change your political future.


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