Capitol Punishment: The Power of Voter Fear and Anger Guest Column by Gregory N. Lippe The voters have spoken. Governor-elect Schwarzenegger says “Politics as usual, are dead,” as he reaches out to both parties to repair the financial disaster that has befallen our state. There’s a general mood of excitement in the air. Legislators from both parties are speaking optimistically about working together to find compromise solutions. The scapegoat has been sacrificed. The impediment to effective solutions has been removed. Now there’s nowhere to go but up. Ah, how wonderful it will be. But wait. Aren’t the legislators that are now so willing to compromise the same legislators that were so unwilling before? What accounts for this dramatic change? What is this phenomenon? Is it Arnold Schwarzenegger? Surely, he appears to have the qualities necessary to be an effective leader. He is disciplined, strong, intelligent, willing to listen and learn, does not appear to have pre-conceived ideas of what can and cannot be done and owes nothing to special interests. I believe that Governor-elect Schwarzenegger can and will be a great leader. However, I believe that what changed the attitudes of our legislators is fear, the fear of losing their jobs. We have just experienced the first successful recall of an elected official in our state’s history. Alas, there is no sacred cow! The number of registered Democrats far exceeds the number of registered Republicans, yet in an election with a significantly larger voter turnout than usual, a Democrat incumbent was replaced by a Republican, having no previous political experience. For this to happen, a significant number of registered Democrats must have voted against their party. So what caused a significant number of registered Democrats to vote for an inexperienced Republican candidate? I submit that it had to be substantial anger, anger with the state of our economy, anger with the budget deficit and anger with politics. In a move reminiscent of the demonstrations of the ’60s, the people have taken control. The hippies and yippies of the ’60s are now “the establishment” and they wield a mighty sword. Their anger can just as easily be directed toward our legislators as it was toward Gov. Davis. I believe our legislators realize this, that they are fearful and that we, the people, will benefit. We have a new gatekeeper to help prevent anti-jobs/anti-business legislation from being enacted. Gov. Davis signed far too many job-killer/business-killer bills into law. Now that our legislators have had their security shaken, it is important to keep the pressure on to make sure that compromise and effective solutions remain at the top of their priority list. The following are the anti-business bills I have chosen to profile this month: – AB 196: Expands the prohibition on sexual discrimination and harassment by including gender, as defined, in the definition of sex. The bill would permit employers to require employees to comply with reasonable workplace appearance, grooming and dress standards consistent with state and federal law, provided that employees are allowed to appear or dress consistently with their gender identity. This bill creates a new basis for employment discrimination lawsuits under the Fair Employment and Housing Act. The potential additional costs of insurance and litigation are a disincentive for the creation of jobs and an incentive to utilize fewer employees. Status: Passed Assembly and Senate, approved by governor Aug. 2, 2003. Valley legislators voting for bill: Assembly, Frommer, Koretz, Levine, Montanez, Pavley; Senate, Alarcon, Kuehl, Scott. Valley legislators voting against bill: Assembly, Richman, Strickland; Senate, Knight, McClintock. – AB 944: Expands the authority of property and business improvement districts created under the Property and Business Improvement District Law of 1994, to levy assessments on businesses for the purpose of making improvements and promoting “activities of benefit” to the businesses within the district. These assessments will circumvent the protections afforded by Proposition 218, which requires that local governments’ authority to impose taxes, property-related assessments and fees be subject to voter approval. The result will be increased costs to businesses, increased costs to consumers and potential reduction in jobs. Status: Passed Assembly and Senate, approved by governor Oct. 10, 2003. Valley legislators voting for bill: Assembly, Frommer, Koretz, Levine, Montanez, Pavley; Senate, Alarcon, Kuehl. Valley legislators voting against bill: Assembly, Richman, Strickland; Senate, Knight, Margett, McClintock. – SB 103: Currently, in conformity with federal income tax treatment, regulated investment companies (RICs) pass ordinary income on to the shareholders without incurring any tax liability at the corporate (company) level. This bill eliminates the conformity with federal law and taxes RICs income both at the corporate level and again at the individual level (as dividends) when the income is passed on to the shareholders. Status: Passed by Senate and Assembly, approved by governor Oct. 2, 2003. Valley legislators voting for bill: Senate, Alarcon, Kuehl, Scott; Assembly, Koretz, Levine, Montanez, Pavley. Valley legislators voting against bill: Senate, Margett, McClintock; Assembly, Strickland Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lever, Lippe, Hellie & Russell LLP (LLHR) and a director of the Valley Industry and Commerce Association (VICA).
