WSJ: Why We'll Leave L.A.

I’m forwarding an Op-Ed that appeared in the Wall Street Journal last week because it highlights my primary issue with the anti-business mentality of our Democratic-elected officials (state and local), as well as showing how the entertainment industry, filled with its liberal crusaders, is going to feel the long-term effects of a non-friendly business environment.

While the Hollywood elite walk the red carpets and talk about how we just need to pay our fair shares, the agents, columnists & contractors who employ much of the entertainment industry, including the stage hands, film support, fashion consultants and numerous catering services for film productions are getting squeezed right out of the city of Los Angeles, and they’re not simply moving to another part of California.

Please read on as the President of Creators Syndicate, well-known to anyone with aspirations in the entertainment industry, warns us about a critical decision he may have to make. (His editorial was so sharp that he was booked on KFI’s John & Ken Show the same day it appeared!)


The business climate is worse than the air quality.

by RICK NEWCOMBE
Los Angeles
If New Yorkers fantasize that doing business here in Los Angeles would be less of a headache, forget about it. This city is fast becoming a job-killing machine. It's no accident the unemployment rate is a frightening 11.4% and climbing.

I never could have imagined that, after living here for more than three decades, I would be filing a lawsuit against my beloved Los Angeles and making plans for my company, Creators Syndicate, to move elsewhere.

But we have no choice. The city's bureaucrats rival Stalin's apparatchiks in issuing decrees, rescinding them, and then punishing citizens for having followed them in the first place.

I founded Creators Syndicate in 1987, and we have represented hundreds of important writers, syndicating their columns to newspapers and Web sites around the world. The most famous include Hillary Clinton, who, like Eleanor Roosevelt, wrote a syndicated column when she was first lady. Another star was the advice columnist Ann Landers, once described by "The World Almanac" as "the most influential woman in America." Other Creators columnists include Bill O'Reilly, Susan Estrich, Thomas Sowell, Roland Martin and Michelle Malkin -- plus Pulitzer Prize-winning political cartoonists and your favorite comic strips.

From the beginning, we've been headquartered in Los Angeles. But 15 years ago we had a dispute with the city over our business tax classification. The city argued that we should be in an "occupations and professions" classification that has an extremely high tax rate, while we fought for a "wholesale and retail" classification with a much lower rate. The city forced us to invest a small fortune in legal fees over two years, but we felt it was worth it in order to establish the correct classification once and for all.

After enduring a series of bureaucratic hearings, we anxiously awaited a ruling to find out what our tax rate would be. Everything was at stake. We had already decided that if we lost, we would move.

You can imagine how relieved we were on July 1, 1994, when the ruling was issued. We won, and firmly planted our roots in the City of Angels and proceeded to build our business.

Everything was fine until the city started running out of money in 2007. Suddenly, the city announced that it was going to ignore its own ruling and reclassify us in the higher tax category. Even more incredible is the fact that the new classification was to be imposed retroactively to 2004 with interest and penalties. No explanation was given for the new classification, or for the city's decision to ignore its 1994 ruling.

Their official position is that the city is not bound by past rulings -- only taxpayers are. This is why we have been forced to file a lawsuit. We will let the courts decide whether it is legal for adverse rulings to apply only to taxpayers and not to the city.

We work with hundreds of outside agents, consultants, independent contractors and support services -- many of whom pay taxes to the city of Los Angeles. This spurs a job-creating ripple effect on the city's economy. Yet I suspect many companies like ours already have quietly left town in the face of the city's taxes and regulations. This would help explain the erosion of jobs.

Regardless of the outcome of our case, the arbitrary and capricious behavior of some bureaucrats is creating a lose-lose situation for everyone involved. If we win in court, the taxpayers of Los Angeles will have lost because all those tax dollars will have been wasted on needless litigation.

If we lose in court, the remaining taxpayers in Los Angeles will have lost because their burden will continue to swell as yet another business moves its jobs -- and taxpayers -- to another city.

As long as City Hall operates like a banana republic, why is anyone surprised that jobs have left the city in droves and Los Angeles is teetering on the brink of bankruptcy?

Mr. Newcombe is president of Creators Syndicate.

Term Extensions: Which is worse – "Bush" or Karnette? (Part I)

The Wall Street Journal ran a very interesting op-ed on Tuesday titled “Bush’s Third Term”. Most of us have heard that slogan used by the Democratic spin doctors to describe Senator McCain’s campaign, but the Journal was talking about the other candidate: Senator Obama. The op-ed points out Senator Obama’s quick re-direction away from the far left agenda to the center by suddenly adopting many of President Bush’s policies & positions. Examples include NAFTA, Nuclear Power, faith-based programs and even support for General Petreaus.

This is proof of acknowledgement by even the Democrat’s top of the ticket that in order to win on issues, candidates need to be centered, and maybe even close to the moderate right. After all, even Democratic voters tend to seek honesty, integrity, family values & fiscal responsibility in their elected representatives. The issue of which candidate’s platform more closely resembles President Bush’s gave me two thoughts: 1) Even Senator Obama has had to acknowledge that not all of President Bush’s policies are bad for the country; and 2) more locally, are we content with extensions of our state and local representation by electing those that would carry on the same policies and voting records as those they are replacing?

In our own district, the two termed-out incumbents are 25th District State Senator Ed Vincent and the 54th District State Assemblymember Betty Karnette. Because most of those in the overlap between the 25th Senate District and the 54th Assembly District are from the Palos Verdes Peninsula and have not been strong areas for Senator Vincent anyway, I will instead focus on the Assembly race that involved all of us here in the 54th AD. Long Beach Vice Mayor Bonnie Lowenthal is running to (literally) replace Assemblymember Karnette, and we need to decide if we as voters are content with 6 more years of the same representation. To do so, we need to see how Karnette has voted on important legislation and decide how they align with the goals of Long Beach, San Pedro, Avalon and the Palos Verdes Peninsula.

To start, voters throughout the 54th AD had a chance to extend the assembly terms of Karnette through last February’s Proposition 93, the deceptively-named “Term Limit Reduction” measure that would have allowed Karnette another 6 years in the Assembly. The measure tried to assert that it was reducing the terms of the current legislative membership, but most voters knew that voting for the measure would extend the number of terms of their respective legislator. The measure was expected to pass because it was assumed that on both Democratic and Republican districts, voters liked their representative and would vote to extend each of their careers. What Speaker Nunez and his political advisers failed to realize is that most voters do not have a favorable opinion of the state (or federal) legislative branch, and are willing to remove their own representative if it means removing all of the other do-nothing legislators faster as well. Combine that with most of our Republican leadership standing behind the Republican platform of term limits, the measure failed across the state. What is interesting to note is that the measure also failed in key regions where it should have passed, according to the Democratic strategy, including within Los Angeles County, and most importantly, within our own 54th Assembly District.

It seems district voters in February decided that Karnette was not worth saving and that new leadership was desired.

So the next logical question is: If voters did not choose to extend Karnette’s representation in the Assembly, do they want a “new” assembly member who will most likely continue to vote & perform the same way that Karnette did?

This is the question I will dive into in Part II of this series by comparing both Bonnie Lowenthal’s platform and Republican Assembly nominee Gabriella Holt’s platform to that of Betty Karnette’s to see whether either candidate can be given the label “Karnette’s Third Term”.

In Part III, I will tie in the Journal’s or-ed about Senator Obama by discuss whether his run to the center, and specifically his embracing of key Republican positions, will help or hinder legislative candidates at the federal, state and local levels, and how the Democratic Party will need to reconcile its messages to have both credibility to the centrists & moderates, as well as maintaining the interest if it’s far-left base to turn out in November.