Props 3 and 43: The Pension Math and the Author Voting No

[00:00:00] California is asking you to make a temporary tax permanent and their promise is that it's going to go to fund education. I'm not talking about Prop 40 and the billionaire's tax. I'm talking about another billionaire's tax. This one is Prop 3 which was passed back in 2012 and guess what? Back then it was sold as temporary and now they want to make it permanent. Is it a foreboding of what could be happening with Prop 40? Also Prop 43 which would make it harder

[00:00:25] for them to raise taxes making a two-thirds threshold to raise any taxes. Also Andrew Doe who was a former Orange County supervisor we're finding out how much money he actually stole during COVID and gave to himself. All that and more on this episode of the California Underground

[00:00:41] starting right now. What's going on everybody? Thanks for tuning in to another episode of the California Underground. Thanks for tuning in live wherever you are. Make sure you let us know if you're tuning in live in the chat where you are tuning in from and before you get started

[00:01:10] as always make sure you like share subscribe review that stuff helps with the algorithm. Also if you're watching this within a certain amount of time I guess you can hype the video as well so I ask people to hype this as well that gets us in front of more people. Also big announcement in big anticipation next week we are one week away from the Gilded State officially being released. That's right. September 8th is going to be the day that this book drops. I'm very excited for it. If you want

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[00:02:08] passion project of mine and let's get started and I want to welcome in my trusted co-host the best the fastest researcher in the west Camille. How are you doing Camille? I'm good I feel like all angelic and white here and you're kind of in the dark far away like I need it's the settings yeah on this camera it's very dramatic I'm learning photography in free time so I'm learning like hello here's my face

[00:02:34] um hi everybody no I'm good so really quick on my end announcement um you know this podcast is not about me but it's no secret that I've been dealing with some health issues and I feel like I've just been hit with one thing after another after another this year it's been kind of crazy and I joked you know I was off the podcast for several weeks and I joked I was on medical leave but basically it was um I'm still not best better yet um I'm still recovering I'm still trying to get back to normal

[00:03:02] and so Phil of course already knows this and we are on the same page about this but we have decided I'm going to kind of take a step back for um for a while from the podcast like I will still be here on and off uh not every week and then if slash when I return full-time is TBD and I'm just kind of you know I need to prioritize my health and then I also start homeschool next week and so that always kind of throws things into even though I've been doing this for a while it's always a little bit

[00:03:29] chaotic to get started and so I'm not saying goodbye but I am like I said taking a step back and so um you know Phil can obviously handle the show alone he's always got great guests there's um with the election coming up very soon I'm sure that there will be other special guests special guest co-hosts and whatnot and and again this podcast isn't about me so um let's carry on

[00:03:53] to tonight's subject yeah uh yeah nothing more really else to add like a like you said uh there will be points and and different episodes Camille will be back um so uh she's not going forever this is not like uh what's that song from sound of music so long farewell of eaters and good night we were just talking about musical theater and choir uh all right before we embarrass ourselves

[00:04:20] anymore before I embarrass myself anymore trying to sing anything uh let's get into our first story tonight and I preface this already with this was a tax that was passed a long time ago back in 2012 I guess that's not really some people might think that's not long ago but in 2012 there was a proposition passed it was prop 30 at the time and it was a temporary tax they sold it as it was gonna

[00:04:50] be a temporary tax we just need a little bit of your money billionaires so that we can fund schools well it didn't actually all go to fund schools actually 40 of it went to fund schools and the rest went into the general fund so always be careful with your ballot language because it always is advertised this one thing and then another thing comes out it there's always like fine language or fine print language that says like oh no actually half of this more than half of this

[00:05:18] goes to the general fund and we can spend on whatever the heck we want so that's what we need to do and I'm not even being sorry I'm interrupting but I'm not even being sarcastic when we get all of our ballot information we need to see what percentage of the props I think there's like 14 props on the ballot this time what percentage of them claim the funds are going to schools but probably all of them secret a lot of them because it seems like everything always is funding schools and then we find out like

[00:05:46] well only you know 2.5 percent is funding schools and that's not even for the teachers it's not even for the students it's like for the administrators or school board or whatever like they're going to get new air conditions in the uh you know school board offices or whatever like it's it's always like that and uh it's crazy it's crazy how much anyway sorry that's a little bit off topic but but for real we're always funding schools with these new taxes and then we're there our schools are

[00:06:13] extremely underfunded so well they always ask for more it's never enough that should be the lesson about any taxes when it comes to california is it's never enough and that's foreboding for prop 40 because of the fact that they claim this is a temporary tax even though we know it's not really a temporary tax so let's look at the language of this uh so this is prop 3 from cal matters great site if you want to go check this stuff out proposition 3 make income taxes on higher earners

[00:06:43] permanent to fund education and health care the tax first enacted in 2012 is set to expire in 2031 under the measure income taxes for top earners range from 10.3 percent for individual income to 12.3 percent for individual income over 721 000 with graduated rates in between 89 of the money goes to k-12 public schools and 11 goes to community colleges with any excess going to public health care

[00:07:10] the tax typically raises 5 billion to 15 billion dollars a year summary is this is those in support the tax has been a vital source of revenue for schools supporters say if prop 3 fails the loss of up 15 billion dollars a year for schools will likely lead to layoffs program cuts and other reductions which will obviously be what they advertise if you vote against prop 3 you hate teachers and you want them

[00:07:35] to lose their jobs and go homeless and starve to death that'll probably be i mean i don't think i'm being like hyperbolic i think that's probably what they're going to run out with any sort of campaign ad about prop 30 opposed say opponents point out that the california already has some of the highest income taxes in the country they say the measure may spur wealthy californians to leave for lower tax states taking jobs and revenue with them and obviously those in support california teachers association

[00:08:03] and they've given a whopping 17 million dollars 17.775 million dollars um mind you mind you they're supposed to be a union this is the pack that gives money someone had asked last week on the the the show because we're talking about non-profits and non-profits that get millions of dollars in taxpayer

[00:08:28] funds and someone had asked whether or not these non-profits can make campaign contributions that was in the comments and i had to clarify no 501c3s can't make political contributions that is a hard red line with all non-profits that are 501c3 you cannot be political you cannot take your money and give it to any sort of political office any sort of uh campaign expenditure anything like that in fact it's almost like a big

[00:08:55] red flag big no-no as soon as that happens you basically lose your tax exempt status um that doesn't change though if you are a political action committee like california teachers association sets up kind of like how all these non-profits like planned parenthood is a non-profit but they have planned planned parenthood pack which is the political action committee arm or wing of planned parenthood

[00:09:22] this is the same thing california teachers association so they can spend money on things like this like propositions so it's not non-profits just want to clarify that um i want to look back at the actual original language of prop 30. this is why i highlighted this right here it says temporary taxes to fund education guaranteed local public safety funding initiative constitutional

[00:09:48] amendment again camille what is the word that jumps out at you in this prop title read the prop title to me i'm sorry it's a little bit small on my screen so it's kind of blurry temporary taxes to fund education guaranteed local public safety funding initiative constitutional amendment what's the word

[00:10:14] that jumps out to you in this the first one's temporary yeah yeah so this was how it was sold back in the day in 2012 was this just temporary this is a temporary tax on those who have more and should be giving more to help fund education if that sounds familiar it's because it is super familiar it's prop 40 prop 40 is

[00:10:41] basically along the same lines of logic which is this is a temporary tax on those who have more than enough it's the top one or two percent it's the billionaires they don't pay their fair share anyway so they should pay more for education that's how this was sold it was re-upped like several times um it never sunset back

[00:11:04] in 2016 prop 55 extended those temporary rates and now we have 2026 which wants to get rid of the expiration entirely um what are your thoughts on the fact that they originally sold this as a temporary tax to fund education and now they want to make it permanent some 14 years later

[00:11:29] well of course my thoughts are hell no heck no whatever sorry language um absolutely not because this is this is what they do when we know we've we've discussed this on here of course and you know in our chats a million times like they're just going to make this permanent this permanent like they've done this with gas taxes and everything and then here we are all struggling to afford gas and then now this and something that's interesting to me so i don't know what the um

[00:11:58] what how many students we had enrolled in public schools back in 2012 but um it's no secret that california is losing public school students whether that's because of mass exodus from california or um just dropped my wedding ring mass exodus from public school in general because it's in california it's failing but in the 25 to 26 school year which basically just ended i know we're starting a new school year but it basically just ended a few months ago they lost just under

[00:12:28] 75 000 enrolled students and um so i don't again i don't know how many were enrolled in 2012 because we've certainly had a lot more people um come into california in the last 14 years and so it's possible that that we have way more students but i just feel like if we're losing students why are we again needing to raise these taxes and and then it always goes back to their you know

[00:12:56] oh the students need this the teachers need this the everyone needs to be paid more and i agree teachers need to be paid more i'm all for that i don't think that they're you know we hear that they're like buying their supplies for their classroom and that's not really fair you don't hear about like like a nurse working at a doctor's office who has to provide the equipment like sure she buys her scrubs or whatever but you know they're not providing the equipment for their

[00:13:21] patients like why are teachers providing their like why are they forced to buy their supplies for their students that's not fair that's the size of point whatever but um it just california we know we have an affordability crisis but taxing is only causing all this inflation and not it's not helping the problem and so all these props that are continuously just like let's do a temporary tax and then let's make

[00:13:48] it permanent we're just really hurting everybody here constantly constantly constantly and giving more power to the politicians just i don't know how to answer questions three i just i just ramble this is probably why i need a break for the podcast you guys the purse dude i want to talk about so the money did it work kind of to what you're saying we've spent all this money on more students even though there are enrollment declining

[00:14:16] numbers and we're going to get to that in a second some of the numbers are per student k through 12 spending rose 14 inflation adjusted from about 9 168 in 2012 to 10 493 in 2016 and 2017 um so the what we spent continued to rise more and more and more and it rose in after those years

[00:14:42] after four years it rose k through 14 spending rose from 47.2 billion to 71.9 billion um and here's what you're kind of going at with the whole enrollment thing is that ppic which is public policy institute california came out with this may of this year enrollment is falling across california school districts california public schools are in the midst of a long-running trend of declining

[00:15:07] enrollment enrollment fell this past year by nearly 75 000 students since 2015 2016 enrollment has dropped in all but one year and there are now nearly 500 000 fewer students in public k tk i'm not sure what does tk mean transitional kindergarten is that what that means yeah like it's like it's four to five

[00:15:30] year olds i believe oh so it's like preschool sort of maybe is that what they call it declines have been substantial who has kids like i always homeschooled i don't know yeah i don't know what what that actually means uh tk anyone who wants to answer it's pretty sure it's transitional kindergarten so maybe your kid is not quite ready for kindergarten that's they want you to transition slowly into

[00:15:56] kindergarten because we all know kindergarten you got to ramp up it's a tough uh great kindergarten all the finger painting and the naps and the snacks you got to train you got to warm up to that you can't just jump into kindergarten it's way too tough on these kids uh goes on to say declines have been substantial in many coastal regions while the central valley has seen enrollment increase however all but one region projects lower enrollment over the next decade so here is the graph showing

[00:16:22] enrollment is falling in most california districts you can see where it's since 2024 25 it's starting to decline so we're actually losing kids enrollment is declining in california um so we're spending more money and some people may argue well that's fine because technically technically and they're not wrong

[00:16:45] the math is if we're losing kids that means that per pupil we're actually spending more right like that should be yeah but it doesn't count it sounds awesome um this is actually a number that i want to pull out so it says california's national rank and per pupil spending moved from 25th to 30

[00:17:12] uh 25 to 35th in the mid-1980s through the great depression up to 16th however however there's always a but in california these so the first number is always the number that people like gavin newsom love to project and talk about but there's always an underlying number and this is again from the ppic if you adjust for labor costs california drops from 16th back down to 31st so

[00:17:43] just to give you an idea yeah it seems like we're spending a lot of money but when you think of the cost of living and how much you have to pay out it's actually not as much as we're spending per pupil so there's always a number under the number and one of those things that we're spending a ton of money on is pensions there's this video i want to show let's see if it will play i think it'll play so i want

[00:18:08] play this quick little video about pensions in california public schools it's not the most exciting story or it's not the most exciting video but i do want to show it so you can see what pensions are doing to the california budget my report is on the teacher pension plan and the other there's also a second pension plan for staff that i talk a little bit about but it's mostly the teacher pension plan

[00:18:36] calsters i guess the reason the most the biggest reason it's important to students is because it's extremely expensive it costs a lot of money and of course more broadly because we we care about our teachers because they're the ones teaching our students and we want them to have a good compensation package that's fair and competitive and so we can keep getting good teachers and keeping good teachers i think the

[00:19:00] biggest finding is that the pension expenditures are really high it's the way it works right now is that the contribution rate to the pension plan for teachers is 37 of their salaries and so for every dollar that the teacher gets paid 37 cents goes to the pension plan so that's quite expensive and it's gone up a lot in the last say a little over 10 years is really the horizon where it's really gone up a lot

[00:19:27] it's also really important to understand that though those higher costs are not corresponding to better benefits for teachers and so it's not like current teachers are getting better pensions with these higher costs the higher costs are all because of debt accumulation in the plan that has to be paid down and so you know one way to say it is current teachers are really getting a raw deal a lot of i just want to point this out and stop right here on the video if people didn't catch that we're spending

[00:19:57] more on pensions for teachers and he's saying that it's not actually ending up benefiting the teachers because a lot of it is actually going to pay down pension debt so when you promise all of these pensions to different teachers and all this and then people start to retire you have to start paying

[00:20:23] people out that's part of the promise problem is though not enough money is going in so they don't actually have enough money to pay out so there's actually this huge debt that california had and so while they raised how much they were spending on pensions most of it was going to pay down the debt of previous pensions if that makes sense so it sounds great but what are you gonna say

[00:20:51] well i feel like this is something you and i have said a million times as well all these taxes are just one big ponzi scheme of in california and i mean this is we've heard you know our generations we're never actually going to get our social security by the time that we need to cash in on social security there's not going to be any because it's same thing we're like paying down the social security debts of our parents and grandparents i guess

[00:21:22] yeah it's just it's uh it's kind of like the trillion dollar pension liability bomb in california that no one ever talks about there's about people say it's between 800 billion and a trillion i think it's probably closer to a trillion a trillion dollars in pension liability meaning there is unfunded amount of pension this huge economic bomb that's going to be about a trillion dollars of

[00:21:49] pension we have to pay out in california mind you we have a huge budget an enormous budget 340 whatever 350 billion is what was proposed this year you think about 350 billion in the scope of a trillion in that's not a lot so you could throw your entire state budget at it and you really wouldn't make a debt and what's happening and no one wants to tackle this trillion dollar pension debt that is just

[00:22:17] hovering out there but that's not the point i wanted to kind of bring that up let's watch the rest of what this guy has to say money that is that districts have to pay to hire them is not actually compensating them at all other states have solved this problem there are solutions so the report i go through a number of examples of states that have fixed this pension problem it's a structural problem and there's a lot of details under the hood about that but there are ways to fix it other states

[00:22:47] have done it i mean most states haven't california is not unique but there are a growing number of states that are fixing this in california and california is not the article goes on to say ideally teacher school districts and the state would contribute enough over teachers careers to fully fund the benefits promised by the formula however like in many states this is not how things have worked out practice in california for many years calsters which is the pension benefit program collected too little

[00:23:15] in contributions as a result is accumulated substantial pension debt as of 2024 the debt in calsters was approximately 89 billion dollars to put this number in context the entire transitional kindergarten through 12 education budget during fiscal year 2020 through 24 was approximately 129 billion so this is what he talks about 37 covered payroll up to 18 from ab 1469

[00:23:43] ab 1469 was passed two years after the original prop 30 which prop 3 is trying to make prop 30 permanent and that's when the legislature passed a calsters rescue plan that ramped school district's pension contributions from 8.3 percent of payroll in 2014 2015 to 19 percent so more than doubled it in the following years uh we already talked about 37 percent of covered payroll annual calsters contributions

[00:24:13] more than tripled in 2014 it went from 4.8 billion to 2024 15.9 billion uh ppic's findings stated plainly rising pension contributions absorbed about 25 percent of the entire pre-pandemic spending increase in 2013 and 2014 to 2019 to 2020 and districts reported spending roughly five percentage points

[00:24:35] less on their budgets on teacher salaries as pension obligations grow so money has to go somewhere and money has to be paid so it has to come from somewhere so if they're not giving it to teachers and they're not spending on students and they're not spending on facilities or anything like that they have to spend it paying down pension debt why are we talking about all of this in terms of prop 30 well

[00:25:02] because the point that we're trying to make here is since prop 30 was passed and now prop 3 is trying to make it permanent we have seen declining enrollments we have seen pension debt explode and how much more we have to spend on pension less of it going to teachers um you could say you there could be arguments said that

[00:25:27] this doesn't all make a causal connection that is prop 30 has resulted in any of those things uh national academic education was nap this is something else i want to talk about nap which is basically the national average for grade points and and different subjects we've fallen in that category as well english and math proficiency

[00:25:52] again is it all causal you don't have to say it's all causal but we've spent a lot of money on education here in california um it's incredible how we continue to throw more and more money at education and we don't seem to have the best paid teachers we don't seem to have the best facilities we don't seem to have the best performing students so the question becomes why are

[00:26:20] you asking for more money if the results are not there and you're a homeschool mom camille obviously your kids are not part of this system and i'm sure this was important to you when you decided to homeschool the idea of i want to homeschool i don't want them to be in public education and now you're seeing the numbers why bearing out um is this something that you what you were thinking about

[00:26:47] doing homeschool that came across your mind that you wanted to take them out of public school or just remove them not even allow them to go to public school well yeah i mean i didn't run any numbers but um you know i understood that children were worth x amount of dollars to the government per year per school year and um that's the system was failing i graduated i was homeschooled

[00:27:15] on and off i went to private school and then i went to public high school so i've i've experienced it all and i graduated last century but um but i saw even in my own public school exposure and i went to a good public school and i had a great experience but i saw like things were getting weird and um um so then when i you know started having kids several years later i wasn't in high school but

[00:27:42] i was just like i don't know if the public school is what i want for my kids they're i feel like they were just teaching the wrong things like they weren't focusing on phonics and cursive and critical thinking and whatnot it was it was just like a lot of garbage was being taught and i didn't didn't want to expose my kids to that but i feel like every year and i always said like this was

[00:28:08] always my answer how long do you plan to homeschool as long as it works that was always my answer i was never like i am homeschooling until the day they die or whatever um but i you know i have now i have four kids and three of the four i have already graduated high school and now i just have one high schooler left uh to finish school so we're we're just going to finish it at this point what's what's the point of putting her in public school but um but every year i found new reasons to be grateful for

[00:28:37] homeschool and continue that process and i get that it's not for everyone and i'm not sitting here telling you to homeschool i will absolutely encourage you if you want the encouragement but i'm not telling you that that's what you need to do um but even in the so my my oldest is almost 21 so he graduated three a few years ago i don't know i can't do math so maybe i shouldn't homeschool um no i can't do the math right now but so he graduated a couple years ago and um from the time

[00:29:07] that he started homeschool you know first grade i have just it's like every year there was new reasons new things were added for me to be like oh yeah i don't want my kids in that i don't want my kids in that and again i'm in a great area i'm in a very conservative area and like we have great public schools the kids are doing well they've got great programs i'm i'm very grateful for the area that i'm in but i just i just thought i can and i don't mean this arrogantly but i just thought i can do better

[00:29:35] for them and so and i and i like this makes me sad i mean i genuinely get we start talking about all this and i get sad because teachers deserve more students deserve more and i feel like the government in california is failing both students and teachers yeah and and that's not fair it's not fair to anybody i mean it's not fair to the parents who are sending their kids to school and this is so silly but i'll

[00:30:04] see like on tiktok because i'm on social media too much but you know like there's just somebody has their opinion of um you can disagree with me all you want but i don't think anybody should be allowed to be homeschooled all because blah blah blah so and so is dumb it's like okay fine you're entitled to your opinions but have you like if you go and spend well at this point if you're doing tk preschool kindergarten

[00:30:30] and then k first through 12 i don't know you're like in 14 to 15 years of public school if you go through 14 to 15 years of public school in your life and you can't turn around and teach your own kids basic school then that should tell you how much of a failure california schools are doing and so if the government doesn't even want you to after completing their uh their school after completing their education system and if they're like oh nope you didn't learn enough to teach your own children then they should

[00:30:59] really be looking inward and finding out why that's a problem again not the answer you were looking for no but i think it's it's a different outlook because of the fact that they're asking for more money and again i don't want to be this guy who says these are all causal connections but there is something to be examined of the fact that since they have passed prop 30 and now they want it to make

[00:31:25] a permanent we've continued to spend more and more money on schools and the results have not been there and you can see that so this is what i was looking at as the the nap naep uh discussing sort of the national average for california uh is that yes at a certain point california this is

[00:31:46] something i want to bring up that at a certain point this is california failing upwards while they would like to say that they were moving up when it becomes in nap in the grades what happened was the rest of the national scores were actually falling closer to california's level so california didn't improve it actually just stayed where it was and it's almost like the grades just got a little

[00:32:15] bit closer so california moved up while everyone came down not great for the rest of the world and not great for california it's not like california actually improved so here's proficiency plainly fourth grade math about 35 percent of california students are proficient eighth grade math 25 five percent are proficient eighth grade reading 28th percent fourth grade reading 29 and the los

[00:32:38] angeles united school district the state's largest district 18 are at or above the nap proficient in 2024 that means that basically only 18 of students in la usd are actually above this national proficient standard i mean that's insane 18 of students in los angeles united school district

[00:33:04] the largest in the entire state there's only that many that are actually above proficient and this was in 2024 a couple years ago average eighth grade score is 260 down from 262 in 2022 while la usd mind you la usd's uh what was the president or ceo or chief or whatever just got in a whole bunch of trouble for some scandal um fbi raided his office so he's out things are going great in los angeles

[00:33:32] while approving an 18.8 billion dollar budget for 25 and 26 against 15.9 billion dollars in projected revenue i don't know how you approve an 18.8 billion dollar budget when you're only taking in 15.9 billion dollars in projected revenue but it just goes to show and maybe that's the point of what we're trying to get at here they will ask for more money and they will ask and ask and ask and a

[00:34:00] temporary tax will never go away because once they slip that tax in it will be here forever and ever and ever and of course they're always going to couch it in this teachers you hate school children don't you want to help teachers and first responders and puppy dogs and ice cream and all of that stuff and they'll make it sound so wonderful but all of these districts are failing falling behind and spending more

[00:34:27] and more money and then they're spending more and more money on pension debt so to summarize for prop three again we don't tell you how to vote here on this show that's not the point of the show we want to give you the facts so that you can figure it out yourself if you're fine with giving more money to education and think that billionaires should be taxed more to throw more money at education in California then go ahead and vote for prop three but if you think that we've probably spent enough

[00:34:54] on education in California we need to figure out a different way and you don't want to keep taxing the billionaires then maybe not prop three for you also i will point out this this is the billionaires tax that newsom and becerra both support so they don't support prop 40 but they do support prop three because they think prop 40 will scare too many billionaires away and they don't think it's prudent

[00:35:21] but they think keeping prop three will continue taxing the billionaires at the rate that they want for education so just to give you an idea if you're still confused about whether you want to support this or not gavin newsom and xavier becerra both support this uh any final thoughts before we jump to our next proposition prop 43 no i feel like i could talk about the california education system for

[00:35:47] hours so i think we should probably move on we yeah there's a lot to talk to and we tried to unravel as much of this as possible uh all right prop 43 this one is a little not super confusing i think that the goal of it is not super confusing the story behind it is a little confusing because the person who actually wrote this initiative buffy wicks from san francisco bay area she's actually telling people

[00:36:16] vote no on this so the person who wrote this is actually saying don't vote for this and there's a long story but prop 43 would raise voter threshold for special tax measures this would make it harder to impose or increase local taxes by raising the threshold for local citizen special tax ballot initiatives to pass from a simple majority to two-thirds and the two-thirds threshold already applies to taxes proposed by local governments but not by individuals

[00:36:45] this measure does not she does not want it to make it harder to pass tax measures right she does not want you to vote for this and make it harder to propose tax measures okay last two weeks ago when i was on we got to talk about nancy skinner i feel like her and buffy wicks are kind of like one in the

[00:37:07] same kind of the same area and they just have the same area they're just these two i won't yeah these two women who i will not miss when they have turned out well as we saw at nancy skinner even if you turn them out uh you still find a way back in the government and start regulating tires so buffy wicks will find she'll become a bureaucrat somewhere in the government and start regulating something

[00:37:32] like your outside gardens or something i don't know because you can't have outside gardens they take up too much carbon or something like that um all right summary is anti-taxes is support anti-tax advocates of champions similar policies for years arguing that special interest groups have exploited the simple majority threshold during low turnout elections to pass special taxes opponents argue that measures would limit the ability to raise needed revenue for local services and make it easier

[00:37:59] for money to interest to block tax initiatives that the majority of voters support i read that as opponents argue that the measure would limit the ability to raise needed revenue i.e. tax you and that to me sounds like a nice winning argument for the support side um because based on our last story with prop three it doesn't seem like raising taxes and throwing more money at this actually does anything to solve a lot of our issues uh people and organizations in support obviously howard jarvis

[00:38:29] taxpayers association we'll get to them sort of the story of what happened here why buffy wicks wrote this but also does not support it reform california oppose california democratic party because of course they want to be able to tax you with simple majorities not two-thirds and of course seiu our favorite one of our favorite union powerhouses here in california uh also behind prop 40 so 14 million has already been

[00:38:56] raised in support and total opposed 85 000 so actually looking pretty good for the support side ton of money coming in from there and right now the opposed side not a lot of money coming in so if i'm betting on what's gonna win based on money prop 43 looks like it's doing pretty well prop 3 is doing well to actually pass different story um quick reminder to everyone who's watching obviously make

[00:39:25] sure you like share subscribe review all that also if you're watching this later on or as a chapter make sure you hit that hype button as well uh so that way it gets spread out to more people so let me find the hype button where's you have to wait you have to wait till after the show so you have to wait till live streams don't get to it's very complicated i know it took me a while i'll figure it out okay okay are you ready for

[00:39:54] the sort of mechanics of what happened here and i'll try to make this as punchy and succinct as possible and if anyone has a question please feel free someone already brought it up actually uh 55512 kevin he's already given away the story so he knows what he's talking about how prop 43 been around measure ula wouldn't exist we're gonna get to that so good catch on your part kevin

[00:40:23] so basically right now what happened was we had prop 13 which was here to one up you he's like i already know all this kevin's like he's bored he's out he's like you can stick around kevin see if we get it right so here's the timeline 1978 prop 13 passed we all know that add two-thirds requirement for special taxes to the state constitution in 1996 prop 218 extended and clarified it for local governments

[00:40:50] so whenever your local government puts on an initiative or a ballot measure or something that requires raising special taxes you need two-thirds majority everyone assumed it covered all special taxes regardless of how they got on the ballot that's what everyone assumed and then in 2017 a case involving a weed dispensary california cannabis coalition v city of upland the california

[00:41:18] supreme court used language suggesting that article 8c's limits might not apply to taxes placed on the ballot by citizen initiative rather than by city council the court suggested without squarely deciding so they kind of alluded to well maybe it doesn't really apply and this is the supreme court so they're the law of the land when it comes to state laws they kind of just intimated like well

[00:41:45] maybe it doesn't really apply in this particular instance when citizens put it on the ballot and that's what this is really about is citizens like individuals who are putting these special tax propositions on the ballot that it has to be two-thirds to pass they assume it's just from city governments so obviously everybody ran with it anybody who's a tax proponent wants to taxi more ran with it saying well this supreme court case from california said that it doesn't really apply to

[00:42:12] us so now all of a sudden all these citizen measures these individual measures not government measures now just have to pass with a simple majority and it's kind of been that way for years since 2017 and let me pull up some of the other points about it so that's the the supreme court case that kind of left it open here we are with prop 43 which is now looking to clarify that basically saying no no

[00:42:37] all of it anybody who puts a special initiative initiative for special taxes on the ballot has to pass two-thirds that is what we are saying so some of the measures that did pass and again we always say local elections matter because we talked about our last episode camille and i uh about the whole karen bass and campaign funds and stuff like that that stuff passed that was voted in by los

[00:43:02] angelinos so it didn't like just get in by the middle of the night that was passed by los angelinos some of the measures that did pass on a simple majority alameda county measure b health care funding sonoma county passed measure h in 2024 for fire protection santa clara passed measure d in june of this year for open space preservation by a simple majority but here's the big one that kevin already gave

[00:43:27] away which is the ula and this is really what it all comes down to and i had to actually look up the ula because i had no idea what the heck it was united to house la they call it ula uh let me pull this whole part up ula is a sustainable funding stream dedicated to affordable housing production and homelessness prevention in the city of los angeles 70 of ula program funds the affordable housing

[00:43:56] program which supports construction rehabilitation and preservation of affordable housing and how they do it it's a special real property and highlight this an additional special real property tax transfer on conveyances of real property over five million dollars this is what they call the mansion tax in los

[00:44:16] angeles so the ula is probably the biggest offender of this that they got it on the ballot and it passed with the simple majority it passed with 58 of the vote so still below two-thirds but it still passed with a simple majority if it had if prop 43 was in was actually in effect at this time it wouldn't be

[00:44:42] it wouldn't be enacted so sorry i gotta fix something right here that's a lot to cover i'm gonna take a quick pause if you have any questions or comments oh gosh don't put me on the spot bill um no that is a lot and um i thought i understood this although you did explain it better so i have a little bit of a better understanding of it but i'm just forever amazed and this isn't

[00:45:11] it really has nothing to do with this particular prop but i'm just forever amazed at how badly how desperately our government wants to tax us to to death like it's just insane that they're like nope we found this possible loophole and we're gonna get out of it this way or we're gonna get into it this way we're gonna make sure we can tax you or at least we can tax this or this and it's just

[00:45:37] i i no offense to anybody but i don't understand in in this state in specific to california i don't understand voting democrat right now i totally could get on board with like i get why democrats are democrats in the whole scheme of things but when it comes to california where it's like not even democrat anymore it's literally just like this crazy leftist liberal agenda i don't understand getting on board

[00:46:05] with it because it really is like who who are we saving who are we helping we're hurting everybody except the politicians and i just it's power power power power to them so corbin asked i don't understand why they want all of our money because they think they're entitled to it i think that's i think that's bottom line i think they think they're entitled to our money i think um i've said this before i think

[00:46:32] that california is veering towards a feudal system of the haves and the have-nots um there's the ultra wealthy who have a ton of power and influence our lord and ladies and then there's the rest of us they want to make us a peasant class and when you make people a peasant class they become more reliant on the government and then when they're more reliant on the government you give the government more power that's just my theory but they're yeah they're drunk with power at this point which hi carbon

[00:47:01] glad to see you here um yeah our california politicians are definitely drunk on power at this point and they just don't know how to give up any of it and i i feel like they just wake up every day and they're like how can i take more power and more money and and i don't even know if they even stop to think about the fact that they're hurting humanity like if they're just so far removed from reality at this point yeah uh i want to talk about some of the what ula did

[00:47:32] in terms of money so in revenue they projected it was 600 million dollars to 1.1 billion dollars a year actual was drum roll please 280 million to 350 million dollars a year so about one third of the projections it's a little bit off a little bit off uh in term in terms of housing production ucla lewis center and rand found a causal link that ula is reducing

[00:48:01] multi-family housing production by at least 1 910 units per year in 18 decline versus 2022 average for projects of 20 or more units basically they made it so that people are less likely to sell because of the mansion tax and how much they would have to pay so money rich people will find a way to get around this stuff and obviously rich people who have big fancy mansions that are five million dollars or over they'll figure out a way what

[00:48:28] to do with it um so it reduced the amount of multi-family it kind of slowed down production actually had the opposite intended effect it was supposed to build affordable housing and it ended up not finding affordable housing or building affordable housing monthly sales rate of eligible properties were down 38 percent in the long run commercial property turnover

[00:48:52] down 78 percent commercial properties not mansions are about half of all ula revenue so they actually shot themselves in the foot and most of the commercial transactions also went down 78 percent and here's the other thing that actually kind of comes back to bite them in the butt is prop 13 if you go on reddit again i go on reddit and i suffer through the reddit comments and subreddits for you guys

[00:49:21] and i sit through them and look at all the idiocracy and the idiocy that's going on in the california politics subreddit i i wade through it to get these stories for you and see what people are saying and everybody says the whole reason that california is in the shape it is is because of prop 13 that's really the reason why california doesn't have enough money i doubt that's the reason why california doesn't have enough money it seems like they are raising more and more money everywhere uh the

[00:49:49] ironic thing here though is because prop 13 properties only get reassessed for property value when they're sold or transferred to someone new in certain instances so if they're transferred within a trust to children stuff like that prop 19 there's a whole whole thing i'm not going to nerd out on the state planning here for you um but by slowing down sales of these mansions you're actually keeping

[00:50:16] the property taxes lower because they're not getting reassessed so you can't bring in more property tax so they've actually shot themselves in the foot so they've shot themselves in the foot like so many different ways and ula might be the biggest example of why prop 43 is being proposed to stop sort of these half-baked policies um finally the cost per unit delivered 1790 affordable apartments were funded

[00:50:43] at an average of ready for this affordable apartments we're not talking about we're not we're not about big family homes with a nice little white picket fence or something like that we're talking about affordable apartments affordable housing funded at an average of 780 000 each my kids are

[00:51:12] gonna live with me forever so well done i'm gonna let them should yeah why not um i have a little bit of land i'll just build some adus or something well but again probably they're gonna cost me 750 000 so maybe not um so they can have a tent city all in all ula has actually done the complete opposite of what it was

[00:51:42] supposed to do uh hasn't as many hasn't raised as much money ahead there's sorry i just there's just never anything of like okay this is what we want to do today how is this going to look one year five years ten years down the road they never ever think that far ahead ever and then all of a sudden they get there one year down the road and they're like oh we need to revise this plan we need to tax more we

[00:52:07] didn't you know we need to close this loophole it's just there's no forethought mm-hmm well they never think that far ahead i mean we've talked about this a bunch of times is that a lot of politicians don't think about the economic fallout um they just think it's good in the moment it gets them votes and that's it um right ironically miss uh democratic socialist

[00:52:37] running for mayor nithya raman is actually behind a move in in los angeles the city council to reform ula or repeal it so he's actually a part of saying that it's been a big problem and she wants to actually be a part of reforming and repealing it uh no offense los angeles but i am so grateful that i do not live in the city of los angeles because i cannot imagine

[00:53:07] having to choose between kieran bass and this woman yeah i'm i i'm sorry for all the people out there uh in los angeles i know there's some people watching from los angeles right now i i'm sorry you have to go through this and have to pick between what is essentially you know a turd burger and a crap sandwich and it comes to your mayoral race that's genuinely an extremely difficult decision

[00:53:33] no i i absolutely agree with you i think it's i've had people in my dms on instagram who are like i don't know who's worse i'm like the devil you know is better than the devil you don't know so true maybe maybe not yeah but it's very hard very hard situation um not great situation i'm sorry los angeles uh and again just a public service announcement you can't

[00:54:00] write in spencer pratt so don't try and write in spencer pratt you can't do that in local mayoral reaction uh elections i know a lot of people thought you can write in spencer pratt you can't um so it's well you can't do that in a general election anyway like you can't write in any candidate so i'm sorry whatever's on your ballot that's your options and that's one of the problems with the jungle primary which should also be abolished but that's a whole different story i think we've talked about the jungle

[00:54:26] primary all right are you ready for the timeline of why buffy wicks uber left bay area liberal authored this and now is telling people don't vote for it sure go right ahead i will all right i'm gonna run down the facts in the timeline so it began as assembly constitutional amendment

[00:54:51] 22 it is authored by assembly member buffy wicks oakland so bay area it passed 68 to 2 in the assembly and 35 to 1 in the senate but wicks publicly opposes it and she said so to social media and reporters but why did she write it is because there was a compromise that cleared two broader measures off the ballot before the deadline i think we've talked about this before when it comes to this

[00:55:18] horse trading when it comes to ballot measures and propositions often unions like seiu will use propositions as a way to negotiate what they really want so like the billionaires tax they tried to negotiate with gavin newsom to say we'll take the prop 40 billionaires tax off of the ballot we'll remove it and pull it back if you and the legislature pass a 2.5 one-time tax on billionaires so they use that

[00:55:48] as a way to kind of horse trade and people will say well we'll pull this one but if you keep this one that's fine we'll keep it one way or another um there were two ballot broader measures initiative 1983 a sweeping tax limitation measured from the howard jarvis taxpayers association and aca 13 a competing legislative measure applying a two-thirds threshold to any initiative that raises a vote threshold

[00:56:15] not just taxes so even if it comes down to vote thresholds not just taxes so basically if they want to say in the future whether or not it's a simple majority or it has to be two-thirds it has to still be two-thirds so basically they're making it impossible so later down the line they can't go back and they've done this with numerous propositions where they go well

[00:56:44] now it's not two-thirds now it's a simple majority and we're going to make it a lot easier and they try and chip away at different tax measures that way so what they did was howard jarvis withdrew initiative 1983 in exchange for aca 22 going on the ballot and aca 13 was pulled so her rationale was it was either

[00:57:09] pass put this proposition prop 33 on the ballot 43 on the ballot which makes it two-thirds for any special tax initiative raised by anybody or the competing measure would have been two-thirds on basically anything voting taxes all of that stuff so the compromise was all right give us this one and

[00:57:31] we'll pull these other two it sounds kind of crazy that she had to end up writing this but it's kind of this is what happens and this is one of the beautiful things about citizen initiatives and the process we have when it comes to propositions is initiatives can be enacted by citizens and people and organizations that put a lot of pressure on sacramento to change their behavior and it also

[00:57:58] gives you a seat at the bargaining table with the legislature where now they can go into sacramento and say well we have these ballot measures that are qualified we could go to the ballot with them or you could propose other legislation or propositions that would get on the ballot and be maybe not as severe as you think so that was sort of the horse trading that happened is that buffy wicks had to write this proposition

[00:58:27] basically aca 22 get it on the ballot because it's less severe than the previous ac 13 aca 13 and that was the horse trading i hope i made that absolutely clear to everybody about how this all works that someone wrote a proposition and now is going out there in public and telling people please don't vote for this proposition that i wrote i need to take you heard about before have you heard of a

[00:58:56] legislator doing that i wrote this don't vote for it please i feel like this is the first time i'm aware of this i don't think i've ever heard of a a assembly member or a senator somebody writing a proposition and putting it to the voters and going please don't vote for this um i'm sure there might be there might be an instance where it's happened in the past i didn't look that up but this is why it's so unique is that you had someone as far it must have pained her to actually write this proposition

[00:59:27] because if she think about it make it harder to raise taxes and you have a bay area leftist who has to write this proposition and put it on the ballot it must have pained her she must have had one of her assistants or aides to it because i don't think she would have been able to actually type out those words about two-thirds required for any special taxes um any comments on prop 43 so to summarize

[00:59:56] again we don't tell you how to vote we just give you the facts prop 43 if you vote yes on it it will raise the threshold to two-thirds for any special tax raised by anyone so it's citizen initiative government all that stuff it will all be two-thirds make basically making it harder to raise taxes in california if you are not a fan of making it harder to raise taxes in california then you can vote no on

[01:00:22] prop 43 but if you want to make it harder to raise taxes on californians you can vote for 43 and that sort of goes along with 41 42 and 43 those are like the the howard jarvis tax protection and triumvirate right there so any should have made i'm not kidding about this we should have made a

[01:00:46] little printable with the propositions and then um the audience could print it off the website and bring it like as notes watch the podcast and be like oh okay i know how i want to vote and they like write in their little notes and then they have that ready to go when they go to vote they're like california underground broke this down for me and i know that i want to vote yes or no on this spot on this um proposition and it's they just take it with them when they vote and they're like

[01:01:14] got my little notes got my little printout you know what i'm gonna vote you could also sorry we did not do that for you yeah again i think it's too close to a voting endorsement but uh like a voter guide and that's not really what we're no but i mean like the printout would have been like they it wouldn't tell them how to vote it would just be like they watched and you gave them the information and they're like okay so i want to vote yes or i want to vote no on this be like a personal thing just just saying we

[01:01:43] should have done that we didn't think about that so corbin asked so do i vote for it again we're not going to tell you whether you should or should not vote for it it's whether you want to make it harder to raise taxes on californians if that's your goal then vote yes if you like raising taxes

[01:02:04] on californians then vote now um also i want to go back to if you do have questions or want more i want to go back to cal matters 2026 voter guide very helpful they break it down for you it's it's very concise i'm a fan of cal matters they're probably one of the more unbiased news sources in california they are a non-profit you know there are good non-profits out there just to be

[01:02:33] clear there's a lot of non-profits that scam people and grift and take a lot of government money uh this is actually pretty fun so for those people who are like i don't know what i want to vote for uh let's say for example prop 43 tax threshold you can go here and you can say okay tax thresholds select at most four statements you agree with and it gives you these

[01:03:00] statements special interests can exploit the current process to pass taxes during low turnout election years this would allow just one third of voters to veto important taxes uh if you don't agree with that the same standard should apply to all special taxes regardless of who puts them on the ballot i agree with that statement um state leaders negotiated this measure behind closed doors it's a fun little thing so if you're unsure about a proposition go to cal matters 2026 voter guide

[01:03:29] uh i already pay too much in taxes it should be harder to tax me more um they don't really give you a lot of things to select from i feel like these are kind of like state leaders negotiate this measure behind closed doors with an interest group i mean they did but that doesn't really matter to me local services depend on special taxes raising the bar could put the funding at risk this would allow one third of voters to veto important

[01:03:53] taxes see like if i click this then it puts it back in that category that's not what i want so they don't really give you a lot of a leeway in terms of statements that you would agree with it seems very slanted in one way i don't know i don't think any of these three statements would actually

[01:04:18] put it in the yes count like the yes column you strongly agree with prop 43 and would likely vote yes so there you go go to cal matters 2026 voter guide if you're unsure about any of these propositions outside of listening to our show uh and you can go there check their quiz and they will

[01:04:42] point you in the right direction maybe do your own research point of the show do your own research and part of doing that is tuning into our show we did have another story we're going to get to but we did have these propositions i want to go over so um i don't think we'll get to the andrew doe story very interesting story about how much covet money he stole for himself um but we're about 10 minutes

[01:05:05] past nine o'clock so do want to wrap this up any other final comments camille uh before we log off for the night as always thank you chat for being here it's always um fun to see the familiar names love uh chatting with you guys live and you know thanks to anybody else tuning in later yeah make sure you like share subscribe review hype it if you're watching it later and it does so what happens if

[01:05:33] you hit the like button sometimes it shows hype button so hyping it also helps as well um yeah and the best thing you can do to support the show that is 100 free is share it with someone who will get something out of this um and yeah don't forget one week from today the gilded state is coming out get your pre-orders you can click this little qr link right here or you can go check it out on amazon the

[01:05:58] gilded state with my name uh we will see you on the next one later everybody