You’re an engineer, you’re a marketer, you’re a founder, you’re a financier. You’re here at Valley Ground Zero — Palo Alto, Menlo Park, Los Altos, wherever — and work is all-encompassing and for a diligent member of the tech ecosystem like you, life in Northern California is pretty darn good right now.
Sacramento? A wide spot on the way to Tahoe. Last chance to get In-N-Out in California. Full of suits and rent-seeking ideologues and utterly disconnected from — and incapable of affecting — your life. Right?
Not right. It’s crucially important this year for tech industry participants to understand that key elements of the Valley’s economic foundation are at risk in the California state legislature. If that foundation starts to crack, your foundation starts to crack. The assumptions you’ve built a career and your lifestyle on may no longer be a given.
Techie First, Politics Second
I’m part of every verbal Venn Diagram I just outlined above. I’m a tech finance guy — a serial CFO. I grew up in Menlo Park when it was just a sleepy suburb of San Francisco, got my MBA here, and have seen Silicon Valley become the best example of creative capitalism in the world. It’s where disruptive innovation and risk-taking are celebrated and rewarded.
I like this place so much that I ran for city council in 2010 and served as Menlo Park’s mayor in 2013. In those roles, I’ve had to pay very close attention to what’s been going on over there under the capitol dome.
Having done so, I’d like to give you five critical reasons you need to devote some brain cycles to — and plan to vote in — this year’s state elections:
1. Sacramento is targeting our innovative companies with excess regulation and aggressive new taxation.
You know that California’s finances have been in pretty rough shape for a pretty long time. That’s got the Sacramento political power structure looking for ways to drain revenue out of prosperous companies and new industry sectors.
Remember last year’s huge Airbnb-focused Proposition F in San Francisco? It was a desperation move funded by old economy interests to hobble a powerful tech-enabled new competitor. It lost, but only after costing Airbnb $8 million and a huge amount of distraction.
Don’t think that was the end of the story, though. Next up: Uber, by way of a push to classify its contractors as full-time employees.
In short, there’s planning and action under way in Sacramento that would tax, regulate, and otherwise hobble all sorts of innovative Valley companies, and there’s a huge and well-funded lobbying effort by entrenched interests egging the legislature on to do it.
If you want to see tech companies lashed down like Gulliver by the Lilliputians, just do nothing and watch.
2. California is headed toward potential runaway taxation from a legislative supermajority.
In 2010 we all passed Proposition 16, which amended our constitution to say tax increases needed a two-thirds vote of the legislature to pass. The current legislature is one vote shy of a Democratic supermajority, and in Sacramento, that supermajority is overwhelmingly in favor of higher taxes. On just about everything and everyone.
We’ve already had an onslaught of increased “user fees” — thinly disguised tax increases — but with Governor Brown at the helm and a potentially unstoppable legislative supermajority, expect tax rates to spike on both income and capital gains, and pretty much every other honey pot the legislature can jam its hands into.
They’re seeking to raise commercial property tax rates sharply and apply sales taxes for the first time ever to services. So you deal attorneys and VC’s, prepare to open an account with the Board of Equalization. Consumers, get ready for new taxes on any cloud-based services you buy.
And those hard-won equity dollars you’ve sweated and strained for? You’ll be fine…as long as you don’t want to, you know, hold onto them.
3. Valley traffic mitigation? Sorry, no.
Finding yourself stuck in traffic more and more these days? Governor Brown doesn’t care. He’s a flashy high speed rail guy. $64 billion for a bullet train to Bakersfield.
Problem: There are lots of ways to get Bakersfield, and frankly, not that many people from the Valley who are trying to get there.
Getting to your office, on the other hand, or, say, home to see your kids at night, is something a lot of people in the Valley want to do. You don’t have to be a car fiend to think we ought to be spending money to renovate BART and upgrade Caltrain.
But unless you’re a believer in autonomous cars sitting gridlocked in formation, the bottlenecks that need attention and dollars are local — not in Bakersfield.
4. Huge, looming public pension liability disaster.
Public employee unions hold massive sway in Sacramento. While public servants are largely good people doing important work, right now their pension and benefit costs are wildly out of control.
California’s facing $60 billion in pension obligations without funds lined up to pay them. Working out a deal that doesn’t sacrifice taxpayers on the altar of public employee pensions is going to require legislators who are beholden to those taxpayers and not to union political bosses. And if it’s not dealt with now, the tax increases that will be necessary in the near future will dwarf what Californians have ever seen before.
Do you have a big guaranteed pension at your tech company? Of course not. It’s not the way things work in the 21st century. Unless you work for the State of California, that is — and then all the rest of us are forced to cash checks that previous legislatures wrote at the behest of public employee union bosses — without worrying that were no funds to pay them.
5. Government reform and modernization.
Did you know that employees at the state’s Employment Development Division — responsible for helping unemployed Californians find new jobs — are prevented from using LinkedIn?
You read that right. The people responsible for putting out-of-work Californians back in productive jobs is prevented from using the most powerful recruiting and job seeking website there is.
And of course it’s a Valley company to boot.
Why? Because the California state government is a creaky Industrial Age machine that is wildly behind the technology of our times — the technology we here in the Valley have helped create and commercialize.
Yes, I’d like to go to Sacramento on your behalf and see what we can get done for California and The Valley.
I’m running as a Republican for the District 24 seat in the California State Assembly. As I said, I’m a Valley guy, a business guy, a numbers guy. I’m a bi-partisan problem solver, and I’ve demonstrated that time and time again working to solve practical problems and quality of life issues in Menlo Park.
I want to go to Sacramento to represent our assembly district, which runs from Woodside and Menlo Park all the way down to Sunnyvale and Los Altos Hills. I want to give the Valley and its economy a voice and be its advocate in the legislature.
Our economic ecosystem — our community — has become the very center of the universe in the business world. The societal transformation all of us have helped unleash is opening up new markets and creating new business models that are driving real wealth creation.
It’s not greedy to want this very special place, this amazing, world-changing community — to continue to thrive.
I believe I can help make that happen if enough of my fellow and like-minded techies pay attention and vote.
Unlike the State of California, I use LinkedIn, so you can find more on my background here.
The primary’s in June. Hope you can make it.
