Rusty Hammer

Thursday, 30 June 2005 05:16

PRO: LAX expansion plan is good policy

Our system of government is, and should be, based on setting public policy through advocacy, debate and discussion. Unfortunately, today the courts seem to have more of an influence on public policy than do the elected officials we choose to make these decisions.

Such is the case with the modernization of Los Angeles International Airport -- a long-needed project that has droned on for more than 10 years.

In the case of LAX, those opposing the well-conceived modernization plan decided that, when things did not go their way, they would sue to block those who would improve safety at LAX and reduce the impacts on local neighborhoods.

The LAX Consensus Plan, which was largely based on recommendations made by the Los Angeles Area Chamber of Commerce after nearly a year of study, separates airport projects into two categories -- green-light and yellow-light projects.

Projects that have general consensus (including the support of the two mayoral candidates) would be green-lighted and begin right away. These projects include bringing Metro's Green Line closer to the airport for improved rail access, widening the south runways for improved safety and moving rental car agencies into one central, easily accessible location. These projects are estimated to cost $3 billion.

Yellow-lighted projects are those that do not have general support and will be subject to more public review, including the Manchester Square check-in center and the demolition of Terminals 1, 2 and 3, which would be replaced by a new terminal complex in the middle of the airport's horseshoe-shaped roadway. The total cost of these projects is estimated to be $8 billion.

Part of the LAX Consensus Plan is a $499 million set-aside for community improvement funds that would pay for road improvements, noise mitigation and job training for local residents.

The Los Angeles region, which, if it were a country, would be the world's 17th largest economy, is served by many airports in Southern California. LAX is the region's largest airport and supports much of the nation's tourism, imports and business travel. Its design is outdated in terms of homeland security, public safety, accessibility, convenience and the next generation of larger airliners.

If nothing is done to modernize the airport, the congestion and security issues at LAX will get much worse. If nothing is done, we will lose tourism -- which drives our economy -- to other parts of the country. If nothing is done, we will see businesses that use LAX for freight begin shipping to other airports, thus costing us good-paying jobs and needed economic activity for tax revenue.

In fact, one should wonder where those who now oppose LAX (those who live and moved into the area after the airport was built) would live and work if not for the economic activity created in their neighborhoods by the airport.

So why are airport opponents suing to stop modernization? Understandably, home values are always a concern. But we haven't seen any evidence of values declining in Los Angeles -- in fact, they continue to rise. Just ask those people what they bought their homes for and what they are valued at today.

Nonetheless, the main reason for the Consensus Plan is to improve the traffic situation in airport communities and minimize the impacts that go along with any airport. Did homeowners near the airport not realize that they were buying homes in the nation's second-largest city near the region's busiest airport?

Opponents of LAX contend that other airports need to carry more of the Southland's load as well. We couldn't agree more, and the L.A. Area Chamber was very disappointed that Orange and San Diego counties have opted not to carry their share of the load. We would like to see more growth at airports in Ontario, Long Beach, Palmdale and Burbank.

Regardless of whether other airports expand, LAX still is in need of improvements so that we can use the airport more conveniently and safely.

The LAX Consensus Plan is the best plan to be introduced so far, and has earned the most support from public officials and airport stakeholders.

To do nothing will make the situation much worse.

Rusty Hammer

President and CEO

Los Angeles Area

Chamber of Commerce

About the author

Rusty Hammer is president and CEO of the Los Angeles Area Chamber of Commerce. The L.A. Area Chamber, with nearly 1,400 members, represents the interests of business in L.A. County. Founded in 1888, the chamber promotes a prosperous economy and quality of life in the Los Angeles region.

About the LA Area Chamber

Founded in 1888, the Los Angeles Area Chamber of Commerce has served the needs of the Los Angeles business community through its public policy and advocacy initiatives and its business development programs and services. The chamber also works to ensure that the Los Angeles area has a business-friendly environment where all businesses can grow and prosper. With this comes paying close attention to the quality of life the region offers our members' employees and families. For more information, visit the chamber online at

Friday, 30 September 2005 06:16

PRO: Reduce prescription prices the right way

There are two measures on the ballot this November that say they’ll lower the cost of prescription drugs, but only one — Proposition 78 — can deliver what it promises.

Prop 78 is modeled after a successful drug discount program in Ohio, where consumers are receiving discounts that average more than 30 percent. Although the Ohio program took effect only this year, every major drug company and more 2,000 pharmacies participate.

According to California’s Health and Human Services Agency, Prop 78 will deliver discounts in excess of 40 percent. A Los Angeles Times news report said Prop 78 “would offer one of the most extensive discounts in the country.”

An estimated 8 million seniors and uninsured Californians with low and moderate incomes will qualify for the program, and because it doesn’t require federal approval, it can begin helping people immediately.

Here’s how it works. Seniors and other Californians with annual family incomes up to $58,000 can sign up for Cal Rx, the program created by Prop 78, at their local pharmacy, in their doctor’s office, on the Internet or by calling a toll-free number. There’s an annual $15 charge to offset the state’s costs to manage the program, and if people qualify for a program that offers deeper discounts or free drugs, they will be referred to those programs.

The state will enter into binding contracts with pharmaceutical manufacturers to provide discounts equal to what they give their largest commercial customers — health plans and large employers, for example. The state will enforce the contracts to make sure the promised discounts are delivered to consumers. Pharmacists will give additional discounts.

Prop 78 does not require a big government bureaucracy to implement, and all drugs are eligible for discounts under Prop 78, not just those on a government list.

The legislature had an opportunity to enact a program identical to Prop 78 this year, but it was caught in the crossfire of special election politics. It was supported by Republican and Democrats, patient groups, AARP, doctors and a long list of others. Our legislature should resolve important issues dealing with prescription drug costs. But it didn’t, and that’s why these initiatives are on the ballot.

Meanwhile, Prop 79 — the rival initiative to Prop 78 — is the latest on a long list of California ballot measures that promise voters something they can’t possibly deliver. It promises lower prescription drug prices but it uses the state Medi-Cal program as leverage to force drug companies to lower their prices.

Who gets hurt if drug companies can’t provide medicine to the low-income and disabled people who rely on Medi-Cal? Sure, drug companies lose sales, but, more important, sick people lose access to the drugs they need. And taxpayers are left to foot the bill when those people have to go to the emergency room for treatment.

The federal government’s Medicaid program provides about half the funding for Medi-Cal, so it must approve any state drug discount program that potentially affects Medi-Cal patients. Under both Republican and Democratic administrations, the federal government has never approved a program such as Prop 79.

Prop 79 also risks the health of low-income patients to give drug discounts to people with a family income of as much as $77,000 a year, including some people who already have health insurance. Prop 79 says that if a drug manufacturer does not provide steep discounts to these higher-income Californians, its drugs will be subject to prior authorization, which means that bureaucrats, not doctors, decide which drugs Med-Cal patients can take.

It is presumed that public employee unions strategically put Prop 79 on the ballot to divert money and resources away from other measures and to set up a huge new government program that would boost their membership. With budget deficits that already affect funding for critical programs, how can we take on a massive new government program?

On top of that, Prop 79 jeopardizes more than $480 million in rebates that taxpayers currently receive from pharmaceutical companies.

A hidden section in Prop 79 will let trial lawyers file thousands of frivolous lawsuits simply by claiming the price charged for the product is too much or that the manufacturer’s profits are too high. The initiative doesn’t define what is a fair price or a reasonable profit.

Worse, trial lawyers don’t need a client to bring these lawsuits and can keep all the money they receive in a settlement. Sound familiar? Just last November, California voters overwhelmingly repealed a law that permitted the same type of frivolous lawsuits.

Prop 78 helps those who need it most — seniors and uninsured Californians who need help affording medicine. And it enjoys bipartisan support — it is supported by groups representing seniors, patients, taxpayers and small businesses.

Prop 78 will bring real help, right now across the state. As responsible L.A. business leaders who care about the quality of life of our region, we should vote yes on Prop 78.

About the author
Rusty Hammer is president and CEO of the Los Angeles Area Chamber of Commerce.

About the L.A. Area Chamber
The L.A. Area Chamber, which has nearly 1,400 members, represents the interests of business in L.A. County. Founded in 1888, the chamber promotes a prosperous economy and quality of life in the Los Angeles region.

In a noble attempt to repair the city’s “pay-to-play” image, the Los Angeles City Council recently adopted new rules that, in part, prevent lobbyists from serving on commissions.

This will be a hollow reform as long as it only applies to registered lobbyists who play by the rules and fully disclose their financial compensation, and leaves unregulated those unregistered lobbyists who don’t disclose at all.

The City of L.A. Ethics Commission’s Web site ( lists a who’s who of influential business leaders who represent developers, city vendors, commercial property owners and others. The rules are that “any individual who directly communicates with a city official for the purpose of influencing ‘municipal legislation’ (as defined in the ordinance) and who receives $4,000 in compensation in a calendar quarter” is required to register as a lobbyist.

But many of the city’s most influential lobbyists are not registered. Why? Before we call the new ethics rules fair, that’s what we would like to know.

Los Angeles’ reputation as one of America’s most pro-labor cities has been strengthened in recent years by its adoption of living wage ordinances and generous contracts to city workers represented by public employee unions. There is no way that labor would have won these concessions without lobbying. Despite this, the fact of the matter is that just a single union in all of L.A. is registered to lobby.

On its face, one must question whether this is illegal.

But beyond that, it is simply unfair. Why? Because by not registering as lobbyists, powerful labor leaders are eligible to serve on city commissions and influence the decision-making processes. Unregistered lobbyists who serve as city commissioners have significant advantages over registered lobbyists.

Besides getting free and preferential parking at city hall, they also have passes to go behind the council horseshoe at council meetings and speak freely with public officials away from the ears of the public and the media.

This practice must stop. It should be disconcerting to all Angelinos to see some of the city’s most influential opinion leaders regularly going past the guards and accessing city council members at will. Unless they are discussing the weather, these unregistered influence-peddlers should have to disclose what they are lobbying on, just as we do.

Many of the individuals I am talking about represent organizations that spent more than $3.5 million in independent expenditures on various mayoral candidates. With the exception of some apartment owners and affluent individuals, virtually all of the independent campaign expenditures were done by public employee unions, the ones that represent city employees and always manage to get pay raises, even when our cash-strapped city cannot afford to hire new police and firefighters.

Now look at the list of registered lobbyists. Not a single one represents a union. In fact, the only union that filed a report last quarter was the airport police, who were fighting a plan to bring them under the command of the LAPD.

This shows that not only does labor invest a lot of money in city elections, but it apparently does not think the city’s ethics rules apply to it.

It is ironic that the city council has passed these ethics “reforms” that will prohibit lobbyists from raising money and being appointed to commissions when, under their very noses, there are influential activists who are paid to fight for city employees but have not bothered to register.

More stringent proposals have been made to ban corporate contributions or those from developers and business interests. What about labor unions?

Some columnists have written that business has bought city hall. With L.A.’s business climate so noncompetitive, that notion is laughable. But what about labor unions?

I am not saying that labor unions are to blame for the small number of people or organizations that may be unduly influencing the public process with their contributions. What I am saying is that influence at city hall is not primarily coming from business.

The developers and business owners being blamed for the city’s problems are getting a raw deal and are being unduly criticized. The city council needs to take a second look and make ethics rules fair.

Everyone who lobbies the city council should register, so that we can all see who is doing the influencing-and what for. That is the only way to ensure fairness and open disclosure.

Rusty Hammer is president and CEO of the Los Angeles Area Chamber of Commerce.

The L.A. Area Chamber, which has nearly 1,400 members, represents the interests of business in L.A. County. Founded in 1888, the chamber promotes a prosperous economy and quality of life in the Los Angeles region.