Tag Archives: California

The California Drought and Inequality: So What’s New?

There was once water here

There was once water here

At first blush, the California Drought and Inequality are not intimately related. Yes, some class warfare has broken out around water usage and new conservation rules.   But that’s not what the title of the blog post is about.  What do the California Drought and Economic Inequality in the U.S. have in common?  The answer is: Neither are nearly as unique or exceptional, as we’re prone to think, because of our blinders and narrow perspectives.  In the great span of geologic time and economic history, each problem, in it’s own realm,  is more the norm, than the exception; more typical than unusual,  It’s important to know this, because, as the adage goes, you must know your enemy to defeat him.

On the Economic Inequality side, it is gradually sinking-in that the period of (relative) equality during the roughly 40 years after World War II, is an historical anomaly for the U.S; an exceptional era, when stars were aligned to create a large middle class that included a large swathe of the “working class.”

On the Drought side, you may be very surprised to learn that the period of explosive growth in Southern California (and the rest of the Southwest) — the 1970s, 80s, and 90s — occurred during the wettest decades in the last two millennia.  Yes, that’s 2000 years, or back to “ancient times.”  That’s not at all exaggerated. Scientists at the U. of Arizona and Columbia U. have built a remarkable hydrology data base dating back to ancient times, which says that the areas we know as California and the U,S. Southwest experienced numerous droughts in the past, more severe than the current one, lasting decades, not just a few years. Read about it and listen to a riveting discussion here.  If you want more technical (and cool) information, try this and this.

Thus, water conditions in Southern California (and most of the Southwest) over the last 15 years would have been considered normal, neither unprecedented nor dire, centuries ago. The situation today is dire” only because we built civilizations where nature may not have intended.  And the technology and ingenuity to overcome nature, may have reached its limits. The situation is real bad.  Here are some amazing photographs of today’s California Dust Bowl.  These are not shown much outside California, because the disaster is proceeding too slowly for the appetites of cable and network news.

Don’t hold your breath or bet on California pistachios while waiting for cheap Mega Desalinization, though MIT is trying hard to overcome the expense and impracticalities of using sea water for drinking and irrigation.  Stay tuned.  Another avenue of hope are the amazing Israeli desalinization efforts, to the point where Israel now has more water than it can use.

In terms of the economy, the several decades from the end of World War II, through the late 1970s, which liberals view as a model for compassionate capitalism, is glaringly atypical in American history, at least back to about 1910.  Piketty & Saez, have documented that, to the satisfaction of most mainstream economists.  You can find all of that data if you start from here.  There is some evidence that Inequality was also the general rule in the U.S. for most of the 19th century, but that is much harder to confirm.

The precise conditions making it possible for wider prosperity in the decades following WW II were never sustainable; some of the factors we don’t want repeated.  The special circumstances include the Great Depression, which ushered in New Deal regulatory, tax, and labor reforms; the economic boost from World War II, the mother of all stimulus packages; and America’s emergence from the Great War as the only intact industrial economy in the world.

The best advice to Drought warriors: Start looking at the Drought as something that doesn’t just end in a few years. The best counsel for Inequality warriors: Stop looking at Inequality as something that will correct itself as soon as job growth accelerates and labor markets tighten.

One difference between the California (Southwest) Drought and Economic Inequality is that lack of water in the Region is natural (going back at least two millennia); while Inequality (arguably) is not natural, not an inevitable result of capitalism, globalization, or human DNA. The leading academic behind the view that Inequality is man made, and can be lessened considerably, with the right policies, and to the betterment of all, is Joseph Stiglitz. He’s a capitalist of the Roosevelt variety (both Teddy and FDR). He’s not a communist.

Am sure you are asking whether human caused global warming is contributing to the Great Drought, which would mean it’s not totally natural. In fact, most mainstream climate scientists believe global warming caused by humans, is exacerbating the current Drought; making it worse than it would otherwise be. You can read about some of that here and here.

Whether or not you believe the Drought or Inequality is a return to a natural state of affairs, it appears there is more hope for rebuilding the U.S. middle class, than for preserving the California life style, as we’ve known it.  There may be other good reasons for not preserving all of it.

After the U.S. middle class has been rehabilitated, they may not be flocking in such large numbers to California, Arizona, Oklahoma, and Texas anymore.  If the Great Drought had happened sooner, the Dodgers might still be in Brooklyn.

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Have “Hate Crimes” Really Plummeted?

Murky Data

Murky Data

I sure hope that “hate crimes”  have actually plummeted in Los Angeles, to a 24 year low, as reported recently by the L.A. County Commission on Human Rights (LACCHR).  The data released by LACCHR was covered in a story buried in the L.A. Times, and hardly mentioned elsewhere.  I’m skeptical about the data, but wish they are true.

The California Office of the Attorney General (OAG) also reports a substantial decrease in hate crimes across the State.   Same goes for an FBI document,  which last year reported “a slight decrease” in those crimes nationally.    These reports from different governments and agencies, appear to rely on some common data sources, so they are not entirely corroborating one another.

Can the LA data really be true? I don’t have hard evidence to the contrary.  I am surely not a knee-jerk denier of government agency data.  I really want it to be true, that hate crimes are in free fall.  But you can’t blame one for being skeptical.

The Zimmerman, Sterling, Ferguson/Brown, Matthew Shepherd affairs, are still fresh in our minds.  So is the shocking video of the NFL football player knocking out his paramour in an elevator.  As is the deplorable banishment of Jewish scholars by some top American and British academic associations, because of differences over Israeli treatment of Palestinians.  And then there were the deeply unsettling images of enraged crowds, brandishing hateful signs in Murrieta and Escondido California, opposing measures and blocking buses trying to find temporary shelter for endangered Latino kids who crossed the U.S. border?

With all of this as background and context, the LA County report says anti-Jewish crimes fell 48%.  And that anti Hispanic crimes also plunged.  Could that be true?

Perhaps skepticism about the numbers is what kept the LA report from receiving more attention   Conservatives might say that “suppression of ‘good news’ by the mainstream media supports the liberals’ “perpetual victim hood agenda.”   But even conservative media, which has an interest in “proving” that vulnerable groups are being treated better and better every day in America, ignored the report,

If the LA County data actually reflect a diminution of hate,  or hate crimes, what would be the explanation?   Effective education?   Effective deterrence?  The haters have left LA for Murrieta?   More likely, it’s  a systematic change in the way hate crimes are defined and reported.  Or, simply yet another disconnect between what’s covered in the news — Zimmerman, Ferguson, Murrieta, and the like —  and what’s really happening to minorities, women, gays, and Jews.   The message: Cable news stories notwithstanding,  love and tolerance are actually breaking out all over.    (I don’t really believe that, but it is possible),

The LA Report itself begins with a thoughtful and candid discussion of the (generally) low quality of hate crime data, the problem of “under-reporting,” and the evolving (shifting?) definition of “hate crimes.”   So, why publish it at all when you think the data are unreliable?

Speaking of “hate,” I hate studies that lead with flashing red lights about the poor quality of the data; and then merrily go on to report them anyway, along with fancy, labor intensive graphics,  and elaborate explanations of what they mean.

I suppose LACCHR is legally required to collect and publish the data. Even if the numbers are in doubt or hard to explain, one of LACCHR’s missions is to keep issues of bigotry and hate crimes on the table,  and in the foreground.   That argument has some merit.   But LACCHR and agencies like them, must take to heart doubts such as those expressed here, work with legislatures and law enforcement officials to strengthen the collection protocols, and provide a solid response to the understandable questions in the minds of skeptics.

It would be really nice if the society was healing,  but we don’t want bad data to make us think the problems have gone away.

 

 

Swiss Cheese and Taxes: California Joins the Tax Break Derby

Not So Stealthy Bomber

Boeing Aircaft: The B-17

Within days of each other, California passed legislation granting generous tax breaks to the aerospace industry (specifically to Northrop-Grumman), and took major steps toward quadrupling tax credits for the State’s disappearing film industry (it’s close to a done deal). The tax incentives for Northrop-Grumman try to help the company gain military contracts to build the next generation of stealth bombers.

Using tax breaks to make industrial policy makes Swiss cheese out of tax systems. Doing it often enough erodes tax bases, loses revenue for states (even when the experts, and surely the lobbyists, tell you otherwise); and it makes the tax system less fair.

Even if tax giveaways “work,” in the sense of (temporarily) retaining or attracting business, there are eventually plenty of victims.  Short of national policy to regulate tax preferences, which is of course unlikely and impractical for now, it’s hard to figure out how to curb bribery and black mail in the guise of tax policy.  Public opinion has thwarted these efforts in some places.  For example, Seattle said NO to the Supersonics’  and NBA’s demands for more public gifting, after burning out on Mariner, Seahawk and Boeing giveaways.

Here, generally, are some of the victims of industrial (tax) policy:

At the highest level, real, “free market” capitalism is a victim, supplanted by a form of “state capitalism” or “crony capitalism.”  That may be the worst or broadest of the bad effects.

Governments refusing to play the game, lose business and jobs (at least in the short run). The Seattle Supersonics moved to Oklahoma City (OKC), when Seattle balked after OKC offered the moon.  (Has losing the Sonics harmed Seattle’s economy?)

Where it’s hard to cut spending in tandem with the tax breaks – that’s the fiscally responsible thing to do — tax burdens shift to small business, less privileged industry sectors, and to ordinary households and property owners.

In places where it’s acceptable to cut core services or safety nets to compensate for tax giveaways, people who truly need them, suffer greatly. Look at Kansas right now as an example.

In California, corporate welfare and tax giveaways, without corresponding spending cuts, can result in higher taxes on the rich, but that option for saving core government services isn’t available in most other places.

Where it’s not feasible to raise taxes on the rich, all varieties of fees are increased, or new ones imposed,  on everything, short of breathing.  Special taxes may be raised on motor vehicle ownership, business licenses,  hunting, other recreation, etc..  These charges are highly visible, surprising and annoying to taxpayers, and often regressive, which fuels more public opposition to taxes.

But governments usually don’t have to make these hard choices anyway. The tax breaks often don’t take effect for a few years; or the experts scoring the measures are pressured into saying they’re freebies.  Indeed, doing it will make money for the state, they say. What a deal!

When governments do a lot of this, and the rosy outcomes don’t materialize, deficits and long term debt mount.  The governments don’t actually pass deficit budgets (because that is usually illegal), but resort to smoke and mirrors. Or, as Letterman would say, “stupid pet tricks.”

Not fully funding pension obligations (now harder to do under new GASB rules), or shifting activities from operating to capital budgets, where you can pay for them with bonds (otherwise known as borrowing), are common ways to look like you’re (magically) balancing the budget, while giving away revenue to special interests, without cutting spending.  It is, indeed, magic.

In the process we’ve turned tax codes all over the country into Swiss cheese. And we wonder why average citizens, small business, and less privileged or sainted industries, cry about taxation.

Total tax burden in the U.S., depending on how you measure it, has been stable or declining for thirty years, according to the non-partisan Congressional Budget Office (CBO).   And the U.S. has lower taxes than most advanced industrial societies, according to a Forbes report.    But it doesn’t feel that way to the average person,  to many smaller businesses , or to industries that are not sacred cows.

The “Business Climate” Studies Will Drive You Crazy

Measuring the Business Climate

Measuring the Business Climate

A commentary in the Voice of San Diego (VOSD) by Irv Lefberg (yes, that’s me), points out that California and its two largest southern cities have performed relatively well as job creators since 2009. This, despite a lot of anecdotes and news headlines to the contrary, about companies leaving the Golden State for “friendlier” business environs like Texas.

VOSD has done some good investigative journalism using real data on the movement of businesses between localities, which showed that San Diego has been attracting more businesses than it’s losing. The net job growth numbers are consistent with the data on business movements.

An important take away from these stories is not to put a lot of trust in most of the “business climate” studies or the rankings of states and cities on  “ease of doing business.” They started appearing about twenty years ago, with the U.S. Chamber of Commerce and Grant-Thornton amongst the most prominent.  I thought those were done relatively well back then.

Today the landscape is cluttered with these reports.  And the news media can’t seem to resist making them into headlines, like one earlier this year which said,  “San Diego Named the Best for Launching a New Business;” followed by another one, ironically, yesterday, shouting that “San Diego gets an ‘F’ from Small Biz Owners.” Read about it here.

The basic (and most obvious) problem with the business climate studies is they make (usually untested) presumptions about what ingredients are needed for baking a good cake. Then they measure each locality against the half baked recipe, often using data which are not even comparable across the areas.

The studies are not all this bad; but as they proliferated, bad money drove out good money,  as is the tendency.  The worst studies are the surveys of “business people” asking them what they think of their city or state as a place to do business.  (The study reported today about small business folk giving San Diego an “F”  was a survey).  How were the respondents chosen?  Are they a representative sample?  Exactly what questions were they asked?   Was the response rate good?  Who knows?

Many of the rankings and climate purveyors don’t seem to be bothered when it turns out that more than a few of their top ranked places for doing business have poor performing economies, while some of the “worst” have been top job creators for decades. This happens a lot, but doesn’t seem to lessen the appetite for more climate studies and “competetiveness councils” to list and purge the worst business polices.

The bottom line is that states and cities ought to first look at their bottom lines before they jump to conclusions about how good (or bad) they are for business growth.  The bottom lines are: job growth, wage growth, and income distribution.

This is not to say that critics of high business taxes or over-regulation can be ignored if the bottom lines of the economy look good. The critics may be onto something that will come back to bite in the future, even if it hasn’t shown up yet in the standard blood work.  Also, the critics usually have a lot of money to spend on political campaigns.

Liberals Need to Pivot on Race Conscious Affirmative Action

Justice

Justice

This post was inspired by a story about vocal opposition in California to a proposed bill restoring race conscious affirmative action (AA) in public university admissions.  Public opposition came mainly from groups representing parts of the Asian community.  Just as I started writing about this story, the U.S. Supreme Court announced a decision to uphold a Michigan voter approved measure over-turning that state’s race conscious AA policies.

This may be a bit confusing, so let’s state it another way. In 1996, Californians voted to ban race conscious college admissions.  When Democrats in the State Assembly sought, recently, to pass a bill over-turning the 1996 measure, segments of the Asian population strongly opposed it, fearing it would lessen their access to public higher education in California. Just a few days later, in a separate set of events, the U.S. Supreme Court upheld the right of voters in Michigan to over turn that state’s race conscious college admissions policies.

The Supreme Court story was of course not buried on page seven. It was in headlines across the nation. The California story, while front page in the LA Times and Sacramento Bee, received much less attention in the rest of the country.

The California story merits at least equal time.  It is a vivid reminder just how divisive AA policies have been since they moved from being “process based” to “outcome based,” and, at the same time, race conscious.  When it turned out that positive, well intentioned affirmative actions to level the playing field and equalize opportunity, produced disappointing results, AA became more result oriented, and openly race conscious. To many, including some liberals, AA took on the flavor of the very injustices it was designed to eradicate.
Result and race conscious AA split not only liberals and conservatives, but (further) fragmented the Democratic Party coalition of working class whites and poor minorities.

The California story, together with the Supreme Court decision a few days ago in the Michigan case, suggests that much more consideration needs to be given to race neutral, and potentially more effective, alternatives to race conscious AA.  An obvious candidate is socio-economic based AA.  Socio-economic based AA allows factors such as parental income and education to be used in hiring and college admission decisions, along with test scores, GPA and other ‘merit” based factors.

In a 2003 decision, Grutter v. Bollinger, the U.S. Supreme Court upheld the limited use of racial criteria to achieve diversity in college admissions. That decision was not overturned in the recent Michigan case.  The controversial policy received qualified support in the highest Court in 2003, albeit with a razor thin, 5-4 margin.

Nonetheless, since AA became openly race conscious, it’s been painfully difficult to argue that the practice is not, paradoxically and oddly, in conflict with the history and laws that are the foundation of the racial civil rights movement: The constitution’s equal protection clause, the plain language of the 1964 Civil Rights Act, Martin Luther King’s iconic and stirring words about judging people based on character rather than skin color, and decades of toil by Jewish civil rights advocates to eliminate the scourge of  (often transparent quotas) in the admissions policies of elite universities.

There is surely an Orwellian quality to arguing that in order to remedy the effects of race discrimination, we need to pursue some form of race discrimination; like the argument of the Vietnam era military officer who said “we had to destroy the village in order to save it.”

The California and Michigan stories also raise this question: “Why is resistance so strong among many liberals to race neutral remedies for inequality, poverty, and lack of opportunity — even to an idea like socio-economic based AA, which has already shown great promise. Why have so many liberals, Democrats, and black civil rights leaders doubled down on race conscious AA, rather than turn to arguably more effective and surely less divisive solutions?

Perhaps because they feel under siege.  They probably are!  It’s hard to be conciliatory or magnanimous about the current Supreme Court’s decision eroding the 1965 Voting Rights Act, or about shameful efforts by states to make voting more difficult. When you think you’re in a war, you feel compelled to adopt the same uncompromising posture as the other side, or perish. Sadly, civil rights advocates may be right about all that. Equally sad, that is precisely how wars escalate.

But the motive of voters who want to repeal race conscious AA, especially ones in very blue states, like California and Washington, are complex. Many probably felt they were taking a pro “civil rights” stance when they voted in Michigan to ban the policy. The Washington State “anti affirmative action” measure which won voter approval in that “blue” state had this question for voters on the ballot: “Shall government be prohibited from discriminating or granting preferential treatment based on race, sex, color, ethnicity or national origin in public employment, education, and contracting?”  Why would a solid liberal, pro civil rights voter not answer that question affirmatively?  That’s the core of the conundrum and paradox here; and the Orwellian aspect of race conscious AA.

Not that AA based on socio economic factors is without principled or legal draw backs.  The most obvious objection is that it (too) is contrary to “merit” based hiring and admissions. Why should a student with a 3.0 GPA and an SAT score of 500, whose family is poor, be chosen over an applicant from a rich family with 3.9_700 credentials?  That’s a good rhetorical question. But if you favor actions to reduce poverty, inequality and lack of opportunity, for people of all races, as I do, it’s a lot easier to accept and defend an approach that doesn’t destroy a village in order to save it.

What’s more, according to a respected Century Foundation study, many public universities have been able to maintain or exceed black and Latino student enrollments by using income as a factor in admissions, including in some states where (race conscious) affirmative action was banned.

Talking with Duncan Hunter and Darrell Issa About the Minimum Wage

Capitol Building; the Other Washington

Capitol Building; the Other Washington

Every cent and precious time spent by progressives in California that is not dedicated to voter registration and turnout is a questionable use of resources for their cause. Put another way, the top three strategies for their agenda should be: (1) voter registration and turnout, (2) voter registration and turnout, and (3) voter registration and turnout; with emphasis on the Latino population. Everything else should be on a back burner, at least so far as 2014 is concerned.

This is neither rocket science, nor an especially original insight. But, I make a point of it because here in the San Diego area, where I live, I see national and local groups right now devoting a lot of effort to advance progressive (liberal, Democrat) causes, like the minimum wage, immigration reform, climate change, economic inequality, or health insurance, by spending a lot of time trying to change hearts and minds.

That is of course admirable. How can anyone question focusing on the issues in an era where attack ads are the main tool of political campaigns. I realize that many activities related to voter registration and turnout are more appropriate and effective the closer you get to the election date; and that getting “your” voters excited about an issue is one way to get them to the polls.

But, if I was directing strategy for progressives in San Diego County, I would seriously question whether a letter writing campaign to Representatives Duncan Hunter and Darryl Issa, asking them to support a higher minimum wage, is worth more than a laser beam focus to register voters; even accepting that October/November is a ways off.  I would err (greatly) on the side of turnout; the rest takes care of itself.  Besides, the California hourly minimum wage is already scheduled to rise to $9.00 per hour starting July 2014; and to $10.00 in 2016; just ten cents below the President’s proposal.

The needle on Latino turnout has a lot more room to move than the one on policy, either for elected officials or (already registered and engaged) voters.  Latinos represent a large percentage of the population in California, but a much smaller proportion of registered and participating voters. For the state as a whole, Latinos accounted for nearly 40% of the population in 2012, but just 20% of voters. In off year elections, the Latino segment of the voting population tends to drop by about 5 percentage points. About 75% of Latinos in California voted for Democrats in 2012.   Again, there is much more room to move the needle on voting participation than policy.

If progressives here persist in their idealistic plans to engage Messrs. Hunter and Issa directly on issues like minimum wage or the President’s overall economic agenda, I would advise they skip the arguments about why those policies are good for the economy.
Skip that entirely, and appeal to their conscience about the workings of representative government.  Just (respectfully) request they, and their caucus colleagues in the House, allow an up or down vote on matters like minimum wage, immigration or an infrastructure bank. Just an up or down vote on bills coming over from the Senate.

That approach hasn’t got much more of a chance to affect Hunter’s or Issa’s votes than the issue oriented discussion, but at least it shows some sophistication on the advocates’ part,, and thus the capacity to be formidable down the road.  Progressives should devote the  freed-up resources to the three things that matter most: turnout, turnout, and turnout; not necessarily in that order.

If conservatives want my unsolicited advice on strategy in San Diego — the advice to progressives was also unsolicited —  I would point to the recently successful Faulconer mayoral campaign in San Diego,  Faulconer downplayed his Republican affiliations and appealed to moderates.  Democrats were not able,  as they were in 2012,  to turn out the Latino vote.   Of course, it didn’t hurt that the election was being held to fill the vacancy caused by a Democratic mayor who was accused of serial sexual harassment.   Nothing that R’s can do strategically to induce that set of circumstances.  My own take was that the reputation of the deposed mayor was less of a factor in the race than weak Latino turnout,  compared with 2012; and an inexperienced opposition candidate.

 

Is California’s Rainy Day Fund A Pipe Dream?

California Rainy Day Fund

When It Rains in California

Revenues are not “going gangbusters,” as we used to say in the heady days of the housing market bubble. Rather, moderate revenue growth is exceeding the cautious forecasts of economists. It’s good the economists have erred on the low side. This is an important distinction, not understood (or reflecting feigned ignorance) by interests who want to either spend the extra money, or “give it back to the people” as tax cuts, as soon as possible.

California’s Governor Brown apparently doesn’t want to do either. He’s out front, advocating a “rainy day fund” to help the state smooth out its boom and bust cycles. “Good government” politicians, and the fiscal wonks advising them, have been advocating sound rainy day funds since feudal lords started collecting taxes in the middle ages, and realized their armies still needed to be fed and clothed when the crop was bad.

All states have something they call a rainy day fund, accompanied by some sort of spending or revenue limitation that’s designed to make money available for a reserve fund. Practically all such mechanisms have failed or fallen short. At best, they’ve worked well for two or three budget periods, before collapsing.

By proposing a limit on revenue, rather than a spending limit, Governor Brown is off to a good start. Spending limits are much more porous, leaky, and easier to game, than revenue limitations. Revenue limits work a lot better, simply because, as former Federal Reserve chief, William McChesney Martin, once remarked, “our main job is to take the punch bowl away just as the party is getting good.”

But, writing the full proof revenue limit isn’t easy either. Which of the vast array of state revenues are covered by the limit?  Does it apply only to “new” revenue?  What if the federal government increases it’s grants to the states, freeing up state revenue for other uses?  Indeed, what is “revenue?” Or, what is a “tax?”

You can ruin a revenue limit pretty quickly by just calling a new tax “Gertrude” (or “Irving”) instead of a “tax.” Or you can tinker with the complex formula that’s supposed to channel excess revenue to the rainy day fund. A really easy way to undermine a revenue limit is to go on a tax cutting binge, as soon as the amount in the reserve becomes material. Or you can send the extra money back to the taxpayers. How many politicians can resist announcing that “a check is in the mail,” rebating your property taxes for the last year?

Tax rebates are actually better than cutting taxes, because tax reductions erode the tax base permanently. Then, using the reserve when its raining becomes irresponsible, because it’s not sustainable. Of course, why even go through all these maneuvers. All you have to do is suspend the formula that directs extra revenues to the reserve……”just this one time.” “Not to worry, we won’t do it again.”   Or “we’ll do it till we need glasses.”

Easier still, is repealing the annoying revenue limit. After all, its just a law, like any other; there’s nothing to bind future Governors or Legislators. But how many voters will really care about the reserve when they’re getting more services or lower taxes? And, if your state has a really “progressive” initiative and referendum” process, any well funded interest group can gain voter approval to demolish the revenue limit or steal money from the rainy day fund.

SONY DSC

If You Know How to Fish, You Don’t Need an Umbrella

1) The revenue limit, needs to be backed up by a simple requirement that a small percent (maybe 1%) of all forms of revenue — user fees, interest earnings, money from unclaimed properties, and even “Gertrude” monies – need to be deposited quarterly in the rainy day fund, no matter what, even during bad times. During bad times, you can take the money right out again, but it needs to go into reserve first, just like the automatic deposits you set up for your daughter’s college fund.

2) The 1% requirement, along with a (simple) rule governing when and how the money can be removed from the reserve and spent, also needs to be enshrined in the state constitution. Placing this sort of thing in the constitution is dreaded by some and laughable to others. But the whole point is to make it hard to evade.

3) Because the rule for when the money can be accessed needs to be relatively short and simple — you want to avoid a 10,000 word amendment to a constitution — it needs to be backed by a constitutionally enshrined body which interprets and applies the rule. Sure, that can make it porous again, but if this commission has equal membership from the two top caucuses in the state legislature, with the tie breaking member appointed by this initial group, there are a lot of protections.

 4) And, the amount in the reserve needs to be capped – perhaps, at 5%, 7% or 10% of total revenue, so the politicians can experience the joy of sending a (one time) check in the mail (with their names on the signature line) back to the taxpayers.  There’s got to be something in this for the politicians.

Is all of this hard and nerdy? It sure is. But it’s the only approach that has a chance of working. It just might provide a real reserve, if you can keep it.