This is the story of three bills that, while superficially distinct, reflect the expansive tenor of the Legislature’s Democratic majority – a belief that making government larger and/or more intrusive is beneficial.
However, all three flunk the smell test, and two of them fell by the wayside before the Legislature adjourned last week.
First, the two that failed.
– Assembly Bill 1027, introduced by Assemblywoman Autumn Burke, a Los Angeles Democrat, would have added a new wrinkle to the state’s array of tax breaks and other subsidies for certain business activities. It would have allowed the state, in some instances, to subsidize firms in return for a state ownership interest.
The subsidies are already highly questionable and have drawn sharp criticism from, among others, the Legislature’s own budget analyst.
The potential mischief from making the state part-owners of businesses it subsidizes is limitless. And while the Assembly wasn’t bothered by that potential, the Senate’s leadership fortunately thought otherwise and quietly buried AB 1027 before it reached the Senate floor.
–Assembly Bill 161, carried by Assemblyman Phil Ting, a San Francisco Democrat, would have prohibited large businesses from issuing paper receipts to their customers, unless requested, by making electronic receipts the default.
“They’re wasteful and they’re toxic,” Ting contended. But the bill drew opposition not only from the affected businesses but from privacy advocates.
“It’s trying to reduce paper waste and that’s commendable, but we just want to make sure that in the process we’re not creating a big digital trail for everyone who goes into a drug store,” said Bennett Cyphers, a technologist for the Electronic Frontier Foundation. “If the business needs to collect some kind of contact information, what do they do with that data? It’s going to be a field day for data brokers, data about what people buy and who’s buying what and when. We’d really like that not to be the case.”
AB 161 also whipped through the Assembly, only to be indirectly killed, like AB 1027, by Senate leaders.
Both bills demonstrated the Legislature’s tendency to make decrees with little thought to potentially adverse consequences.
The third measure, Assembly Bill 857, also contains downside risks – big ones, in fact – but it survived the legislative mill and is now residing, figuratively at least, on Gov. Gavin Newsom’s desk.
AB 857, proposed by Assemblyman David Chiu, also a San Francisco Democrat, would allow local governments to create their own “public banks.”
Chiu railed at “Wall Street bankers” that mistreat consumers and portrayed public banks as an antidote to finance progressive projects and services and shun loans to such politically incorrect businesses as oil drilling, guns and cigarettes.
“The private banking system has unfortunately failed,” Chiu said, contending that public banks would “keep taxpayer dollars in local communities.”
As with the two bills that failed, the negative consequences could be immense.
There are roughly 5,000 units of local government in California, ranging from immense Los Angeles County to tiny mosquito control districts, and some of them, small cities particularly, have been vessels of corruption.
At the very least, if Chiu’s bill becomes law, we could see political pull being used to direct loans from these banks. At the worst, we could see the sort of blatant self-dealing that causes Assembly Speaker Anthony Rendon to call his Los Angeles County district a “corridor of corruption.”
Rendon was one of 42 Assembly members who voted last Friday to send AB 857 to Newsom. He, of all people, should have known better.
CALmatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters.
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