Silicon Valley Millionaire Candidates' Club

21st Century politics in California and, in particular, the Bay Area has become the domain of both traditional politics and a seemingly unending supply of Silicon Valley millionaires and billionaires who seek public office as if it were a new venture capital investment.

The common thread among these millionaire politicians is their claim to bring the business perspective and “innovation” of Silicon Valley to California government.

But the “innovation” many of these candidates tout is vastly different and what it could mean for state government services is ill-defined.

This year, the “innovation” politicians are ubiquitous and competing for offices from Governor to Assembly. They include former E-Bay CEO, Meg Whitman, who is squaring off against former SnapTrack founder, Steve Poizner, for the Republican nomination. Both candidates are billionaires and are willing to spend their millions to win.

Whitman, a resident of the town of Atherton, is running for her first political office, and running for the top job in the state. Her campaign website is filled with buzz words promising “innovation” on all fronts which mostly rests on punishing the California legislature and pushing massive tax cuts at a time when the state is currently teetering on insolvency.

Steve Poizner’s first round in politics was a narrow loss to Assemblyman Ira Ruskin, who eked out a win against Poizner’s money machine in 2004, despite being outspent by millions.

But just two years later, Poizner was back in action and was able to pump enough funding to run and win the State Insurance Commissioner post against a weaker Cruz Bustamante.

Now Poizner, who resides in the town of Los Gatos, is going for the top spot in California on a promised platform of “innovation”.

Poizner’s pitch for fixing the state budget is a 10% cut in personal income taxes, the state sales tax, and the corporation tax coupled with a 10% cut in state spending over two years and the establishment of a $10 billion Rainy-Day Fund by the end of his first term.

Surely sounds innovative.

The problem is what happens to state services when Poizner cuts an additional 10% out of a budget that has already been cut by as much as 30% over the past few years? How do we pave the roads—especially if we cut revenues the state collects by another 10%, and then divert another 12-13% of the budget into a reserve fund?

Well, perhaps Poizner has an innovation that he can use to maintain funding for health care for the poor and elderly and to keep school class sizes under 45 kids per class at that level of budget reductions. That would truly be an innovation.

In turn, former Hewlett-Packard CEO Carly Fiorina, another Republican, has put her hat in the ring to take on Barbara Boxer in November. Fiorina currently lives in Los Altos Hills.

On her website, Fiorina states: “Washington must do the same two things most families and business do when things get tight: reduce spending and pay down debt. That requires taking on the difficult task of prioritizing programs and spending our taxpayer dollars where they have the greatest impact.”

Fiorina’s goal for reducing the federal debt: abolish “earmarks, forcing honest accounting, taking the power to cook the books away from politicians, and limiting federal salaries and benefits.”

Innovative. Maybe that would solve 0.1% of the budget problem.

But the Silicon Valley millionaires club has produced a couple of Democrats, too. Former Facebook chief privacy officer Chris Kelly, a resident of Palo Alto, has thrown his hat into the crowded ring for the office of California Attorney General. Kelly has dumped several million dollars of his own money into his campaign coffers, hoping to best several legislators desiring to extend their political careers in statewide office, including San Francisco District Attorney Kamala Harris.

Kelly’s messaging in particular has focused on his technology background. Early in his campaign, Kelly issued a press release detailing his basic plan to “emphasize innovation as a means to a more efficient government”. It is light on details—as is all of Kelly’s proposals—including how funding for these many technological investments needed to yield these savings and efficiencies would come about.

More locally, Josh Becker, a Valley venture capitalist is running in his first political bid for the 21st Assembly District against San Mateo County Supervisor Rich Gordon and former Palo Alto Mayor and Councilmember Yoriko Kishimoto.

Becker’s campaign moniker touts him as “The Innovation Democrat”. The first statement on his webpage states: "I am committed to bringing the Spirit of the Silicon Valley to the State Capitol. California needs that Spirit.”

One of Becker’s solutions to solving the state budget deficit: “We need to work to bring government into the 21rst century and evaluate government functions from the perspective of the consumer. The average citizen in California should be able to find and evaluate information about our State’s budget and priorities. Too often, small businesses in California find it impossible to navigate the bureaucracy and government workers with good ideas have a hard time getting those ideas heard. We can use incentives to free up the good ideas within government and allow best practices from the private sector to be used.”

The “innovation” associated with Becker’s proposal for an internet based suggestion box is marginal and the likelihood of it actually proving tangible benefit in addressing the state budget deficit is questionable at best.

While approval ratings for the state legislature hover at historic lows, many new faces are emerging on the political scene to seize the opportunity–and voters just may bite.

But the danger for Californians in buying into “innovation” is that that the innovators may just really be inexperienced policymakers who have little understanding of the workings of government and no real means of affecting change.

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Strange opposition to Burlingame school tax

For the first time in memory, Burlingame voters received mailers and robotic calls advocating that they should vote against a measure to extend local levies that provide additional funding for the Burlingame Elementary School District.

On March 2, 2010, voters residing in the school district overwhelmingly voted in support of Measure B, a local referendum on consolidating two existing parcel taxes into a single $180 annual property tax and extending it another ten years, via an all-mail special election.

The arrival of the mail pieces and the robotic calls opposing Measure B surprised supporters not so much because there was opposition—but because of the origin of the opposition: the People’s Advocate of California.

For the uninitiated, the People’s Advocate is the organization founded by Paul Gann, co-author of the famous property tax revolt initiative Proposition 13. The organization frequently works through statewide initiatives to push for a variety of politically conservative policy changes.

Among the many efforts sponsored or supported by the People’s Advocate were initiatives to make English the Official Language of California (Prop. 63) and the history-making effort to recall Governor Gray Davis in 2003.

So why would an organization that works on such major statewide issues get involved and pay for campaign materials against a local school tax?

Short answer is that they did and they didn’t. The funding, according to the Secretary of State’s campaign filing website, actually came from a Burlingame resident in two installments made in May and October of 2009, totaling almost $9K.

It is still not clear why this individual took on the fiscal burden of funding the anti-Measure B effort through the People’s Advocate rather than opening a local and recognizable political action committee.

The donor was a Burlingame-based brokerage realtor, and while it is well-known that realtors dislike any burden that can complicate a real estate sale such as a new or extended property tax, most realtors acknowledge that one of the major draws to Burlingame is the schools which many families or prospective families find attractive.

Despite the financed opposition Measure B, received 71.2% of the votes cast, about four percentage points higher than the legally required super-majority of 66.66% of the voters.

Looks like there will be no tax revolt in Burlingame anytime soon.


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Resignation or special election? All eyes on on San Mateo County Supervisor Mark Church

Midterm vacancy will force Supervisors to choose election versus appointment again

San Mateo County Supervisor Mark Church will most likely be successful in winning the seat for San Mateo County Assessor Clerk Recorder Office this June as there are no other candidates running, and according to the County Elections Office website–the office in which Church will oversee at his new post this coming November–he may just do so again as no one else has filed to run against Church for the seat. This could mean that the election will be over even before it began.

But with Church leaving for a new office, he will also vacate his seat on the County Board of Supervisors in the middle of his final four-year term, leaving his colleagues with a hard choice: to appoint a replacement or to call a special election in early 2011.

In 2008, following former Supervisor Jerry Hill’s ascendance to the State Assembly, the remaining four members of the board appointed former San Mateo City Councilmember Carole Groom to Hill’s seat. The appointment process–in lieu of a special election where people actually get to vote-drew howls of protest from many corners of the county, including many local newspapers: the San Mateo County Democratic Party, The Republican Party, the League of Women Voters, and the Loma Prieta Chapter of the Sierra Club to name a few. Groom was appointed anyway and is at present running with only token opposition for election this June.

The primary rationale for the appointment was that a special election would cost approximately $1.6 million, funds the county did not and does not have to spare in a period when the county is struggling with a $150 million structural deficit.

In fact, many of the advocates for appointing Groom cited cost concerns over a special election as a major impetus for the appointment.

Local labor leaders such as Nadia Bledsoe, the union representative for AFSCME Local 829, which represents hundreds of county employees stated publicly and in the local labor newspaper that $1.6 million represents “enough medical staff to provide immunizations to guard the public health, enough Conservators in Aging and Adult Services to protect elders from abuse, and enough environmental and health inspectors to ensure food establishments are clean and serve safe food.” The $1.6 million represented “enough pediatric nurses to care for children in county clinics, enough psychiatric technicians to treat seriously mentally ill people in crisis, and enough social workers in Child Protective Services to protect children in the county,” she said. “We believe this is enough to justify the appointment process,” Bledsoe said.

Bledsoe and company won the day in 2008.

But since then, the San Mateo County Civil Grand Jury–a panel of 19 county residents annually charged with investigating, reporting on, and making recommendations for reform on local government agencies and policy issues–issued a scathing report on Groom’s appointment concluding that it should not have happened and that the County Board should consider changes to the County’s charter to prevent such mid-term appointments from happening in the future. Deliberations for implementing such a potential change are underway now.

With all of the public outrage over the appointment, it is unlikely that the remaining Supervisors wish to travel the appointment road again and would likely opt for a special election.

But a special election in the spring of 2011 will face the same test and cost the same amount of money in an even worse financial climate for the county than it faced in 2009—so, what will the board do?

There is one possible solution. If Supervisor Church can be convinced to resign his current post early, perhaps in June of 2010, a special election could be consolidated with the existing November 2010 general election. There would be little additional cost, democracy would be served, and everybody wins.

Even Church himself, in defending his vote to appoint Groom in 2008 stated in the local press that "Every million counts and every dollar counts," as his reason for balancing the county’s financial woes against holding an election.

Let’s see how the Supervisors handle the challenge this time around.

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Election tidal wave hits Pacifica

The City of Pacifica is again set to face roiling political seas with the qualification of a local initiative to establish term limitations for members of the City Council on the November 2010 ballot.

The initiative is sponsored by two local denizens who are, apparently, unhappy with the incumbent members of the council and the perceived power of incumbency as a leg up in reelection bids.

Local activists Bernie Sifry and Deborah Nagle-Burks sponsored the drafting and signature effort for the initiative hoping to blunt what Sifry referred to, recently in a news article, as the tradition of “career politicians” sitting on council in the small coastal city.

The intent of the initiative, as detailed on the website of the Pacifica Friends of Good Government—the formal group sponsor for the effort, would limit local citizens from serving more than two terms on the council, including partial terms. If adopted by voters, the clock would begin as of the next election, meaning all incumbents currently on the council would only be eligible to run for office twice more for a potential eight additional years on the council.

Pacifica has a long tradition of efforts in attempting to change the outcome of an already democratic process. In fact, Pacifica has experienced no less than five recall efforts of past city boards since 1977, only one of which was successful. In a 1992 recall effort, four councilmembers were removed from office—much of the tide of anger was tied to a local tax that had been recently imposed.

But the argument that Pacifica’s City Council is dominated by “career politicians” merits some analysis.

The council is comprised of five elected members who serve four year terms and are elected in staggered terms every even year. Of the five elected members, there are new comers, those in their midcareer, and a couple of veterans. The most senior member, Pete DeJarnatt was first elected in 1996 and is now in the middle of his fourth term in office, or his 14th year.

The next most senior member is Jim Vreeland who was first elected in 1998 and is just finishing his third term in office, or in his 12th year.

Two other members, Julie Lancelle and Sue Digre, were both elected in 2002 and just finishing their respective second terms, or eight years of service each.

Lastly, Mary Ann Nihart, the newest member, was elected in 2008 and is in the middle of her first term, or second year of service.

The spread of terms of service represent the long, the middle, and the new, and in terms of Pacifica, is actually fairly typical in comparison to other communities and reflects a paced but steady turnover.

Moreover, the City of Pacifica has had contested City Council elections for nearly every election for decades now, which many incumbents have lost and already done so. Nihart herself bested three-term incumbent Cal Hinton in the most recent council election 18 months ago.

Lastly, the term “career politicians”, as applied to local elected officials is simply silly. Councilmembers in every Peninsula community are part-time—citizen legislators who spend too much time away from their real jobs and families for these local offices as the work demands are high and escalating every day while any reward for service other than the satisfaction of service itself have changed little in decades.

To call these volunteers—and they more or less are volunteers as the compensation afforded to councilmembers amounts to peanuts every month—is patently ridiculous.

What the sponsors fail to understand is that the governance of even small communities is becoming very challenging, time consuming, and simply exhausting. Beyond the borders of any city, many councilmembers must work hard to build relationships with their colleagues in other communities and a variety of other interests in order to secure valuable appointments to regional boards and commissions that can and do provide a great deal of resources to local governments including regional transit boards and many other grant-making agencies. Without some tenure and a potential future, achieving a ranking position on these boards is all but impossible.

And by limiting the time individuals can serve will require Pacifica to offer up more and more candidates for an office that gets less and less credit or appreciation for its service.

Simply put, this is a terrible proposition for Pacifica.

The term limits initiative in Pacifica is a solution in search of a problem that will actually do far more harm to the city than any potential good.


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San Mateo County taking another turn at taxes

According to local news reports, San Mateo County’s mounting deficit has hit an estimated $150 million, and county administrators and elected officials are scrambling to come up with ways to bridge the gap. However, the wholesale closing of major facilities or major programs is still not necessarily on of the table.

This month, county department heads are expected to provide the San Mateo County Board of Supervisors with their proposals to reduce expenditures within their respective departments, although conflicts within the Deputy Sheriff’s Union and the District Attorney’s Office have already strained what will be a difficult budget process.

As part of the strategy to deal with the budget, the County Manager was to obtain the services of an outside consultant and create an advisory panel to work with such a consultant--implemented in a plan adopted by the board at a recent Feb. 9, 2010 meeting. They would then, if one assumes the electoral viability of, explore several tax generating options to place on the ballot, either in June or November 2010.

According to the plan, the consultant would review one or all of the following options, or perhaps others.

Countywide Sales Tax (1/4 cent) which could yield approximately $30,000,000 per year
• Utility Users Tax (Phone, Wireless, Electric, Gas, Water and Cable) which could yield approximately $2,000,000 per year
Commercial Parking Facility Operators (Measure Q) which could yield approximately $500,000 per year
Vehicle Rental Businesses (Measure R) which could yield approximately $3,000,000 per year
• Uniform Business License Tax, the yield for which is undetermined
Transient Occupancy Tax (hotel tax) which could yield approximately $100,000 per year

Unfortunately, many of the ideas the County Manager has proposed have already been attempted.

In fact, a countywide sales tax was attempted twice in the past few years, the most recent of which was Measure O, a 1/8-cent sales tax for city and county parks. That measure failed twice at the ballot and was half of the sales tax proposed by the county.

In addition, in November 2008, the board placed two measures on the local ballot designed to raise much needed revenue. The first, Measure Q, was an 8% business license tax on gross receipts of operators of commercial parking in the unincorporated County area, meaning San Francisco International Airport. This measure would have raised roughly $4 million annually without significantly impacting the pocketbooks of County residents.

The second tax effort, Measure R, would have levied a 2.5% business license tax on gross receipts of vehicle rental businesses in the unincorporated county area, meaning the airport as well. This measure would have raised roughly $7.5 million annually, as the tax itself would have generated tax revenue from car rental enterprises at the airport, which generate a great amount of tax for the City and County of San Francisco, but little for San Mateo County.

Both taxes would have generated money from visitors from out of town; so, theoretically, there should have been little in the way of opposition from county taxpayers and voters.

Both measures failed to garner even a simple majority on a ballot that included newly elected President Barack Obama. Measure Q garnered only 47.4% of the voter and Measure R garnered only 47.1% of the vote.

With a little support, both measures could have easily passed muster but both were simply abandoned. While San Mateo County's Supervisors placed them on the ballot, none took ownership of the measures nor helped to coordinate support.

Since then, according to the county elections web site, no less than 15 local jurisdictions have placed 20 tax measures on the local ballot in four separate local elections to raise new revenues in 2009 alone—with only some success as five of the measures failed even in such tough economic times.

In 2010, four local school districts have sought or are seeking new or renewals of local parcel taxes, and more districts are considering such an option including the Cabrillo Unified School District, the South San Francisco Unified School District, and the San Mateo County Community College District.

The county has been running in the red for several years and has been depleting its reserves to cover ongoing costs for several budget cycles. Last spring, the county announced that it had a $29 million structural budget deficit, prior to the Lehman Brothers collapse and before the full extent of the state economic meltdown was known. Now the deficit is $150 million and counting.

This month, county residents should know what the county’s consultant will propose and what the Board of Supervisors may elect to do. But the capacity for new taxes to support County services and the ability of the County’s elected leadership to see it through remain to be seen. Part of the package of taxes could have already been in place in 2008 and already generated a great deal of revenue had someone taken the reigns and mounted a campaign in support of the airport parking taxes. But obviously, no one did.

Nonetheless, voters in San Mateo County can expect a steady stream of local tax measures on the ballot in a series of elections to come.

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