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Johan Klehs
Veteran California politician
Public Policy Advisor

Johan Klehs

Johan Mahler Klehs (born June 27, 1952 in Alameda, California) is a veteran California politician and public policy advisor. He is a Democrat.  For over 35 years, Klehs has been at the center of public policy in California, as an expert in budget and tax policy as well as legislative and political strategy.  Klehs served as a Member of the San Leandro City Council, Member of the California State Assembly, Chair and Member of the California State Board of Equalization (BOE), and Member of the California Franchise Tax Board (FTB).

 

Klehs is married to Margaret Caldwell, Deputy Director for Oceans at the David and Lucile Packard Foundation. They reside in Saratoga, California.

Early Life and Education

Klehs is the son of Georg and Liselotte Klehs. Georg Klehs was born in Hamburg, Germany and immigrated to the United States on the S.S. Noordam in 1920. He served for 19 years in the California National Guard and U.S. Army. After World War II, he worked professionally as journeyman carpenter throughout the East Bay. Georg Klehs was President of Carpenters Local 194 in Alameda County. Liselotte Mahler Klehs was born in Oberndorf an die Oste, Germany and grew up in Berlin. In 1949, the couple married in Drochtersen, Germany and settled in Alameda, California. Liselotte Klehs served as a Camp Fire leader, President of the PTA, and was active in the San Leandro community.

In 1953, the family moved to San Leandro, California. Klehs attended James Madison Elementary School, John Muir Middle High School, and Pacific High School graduating in 1970. He graduated from California State University East Bay with a B.A. in Political Science and an M.P.A. in Public Administration. In 1988, Klehs graduated from Harvard University’s John F. Kennedy School of Government Program for Senior Executives in State and Local Government.

Klehs began his professional career working on the district staff of Assemblymember Bill Lockyer (D-San Leandro). He served four years in the U.S. Department of Energy and worked as an advertising executive in the private sector.

Public Service

San Leandro City Council

1978-1982
City of San Leandro

City Councilmember

At the age of 25, Klehs was youngest person ever elected to the San Leandro City Council (1978-1982).  He led the City Council vote to pass the city’s post Proposition 13 FY 1978-1979 budget. Klehs was appointed by Mayor Valance Gill to Chair the committee charged with locating the first multi-family affordable housing development in San Leandro. The experience motivated Klehs as a Member of the Assembly to author the Affordable Housing Tax Credit of 1987, guaranteeing thousands of affordable housing units for California families. 

While on the City Council, Klehs also served on the Alameda County Commission on the Status of Women and the Alameda County Airport Land Use Commission.

California Legislature

1982-1994, 2004-2006
California State Assembly

Member of the Assembly

Klehs represented the East Bay in the State Assembly for 14 years from 1982-1994 and 2004-2006. He chaired the Assembly Revenue and Taxation Committee longer than any legislator in California’s history. Klehs authored 142 bills that were signed into law.

Few members of the California Legislature can point to the ground-breaking legislation that is the hallmark of Johan Klehs' public policy career. In the early 1980's, Klehs was a staunch supporter of the landmark AB 1 (Agnos) prohibiting discrimination in employment against LGBTQ persons. In the 2004-2006 legislative session Klehs co-authored legislation legalizing Marriage Equality. He embraced and promoted the United Farm Workers (UFW) to ensure worker safety in the fields.  On behalf of the UFW, Klehs led the fight for the State Auditor to conduct the largest audit of the pesticide industry in the United States.[1] He authored the Research and Development Tax Credit and the Manufacturer’s Investment Tax Credit.  In 1989, Klehs co-authored California’s landmark legislation to ban assault weapons.

Klehs’ support for organized labor earned him a 98 % plus lifetime AFL-CIO voting record. In 1984, Caltrans awarded a $47 million low bid contract to Rail-Roadway/Hatch, an out of state non-union contractor to build the Castro Valley I-580/I-238 interchange. The project “would be the largest nonunion project ever awarded in Northern California.” [2] Hatch reportedly selected his spouse and a pickup truck owner as the woman-minority subcontractor for the project. Klehs along with the Carpenters Union and other trades, led the fight against the sham contractor who eventually “filed for bankruptcy” [3] when the project was only 1/3 completed. “A complex legal battle against the non-union firm … ended in a major victory … when the Ninth Circuit Court of Appeals issued a ruling which prevent(ed) the firm from bidding on any public construction projects in California for at least one year.” [4] The interchange project was successfully completed by a union contractor.

Klehs’ specific legislative accomplishments included authoring the following bills:

AB 247 (1984)

Provided a financial bailout for the Alameda County Office of Education. This legislation became the model for future school bailouts in California.

AB 797 (1984)

Created California’s first urban water management plan for all major water suppliers.

AB 3900 (1986)

In response to the State Supreme Court case of In Re Valerie N., this bill established rights and protections in cases of sterilization for developmentally disabled persons.

AB 53 (1987)

“The California Tax Fairness, Simplification, and Conformity Act of 1987.”  Along with SB 572 (Garamendi), these two bills were “the most sweeping personal income and corporate tax reform” in California’s history.  AB 53 reduced taxes for 71 % of California’s families, removed 230,000 low-income families from the tax rolls, eliminated tax loopholes, increased personal credits, reduced the number of tax rates. Klehs amendments to SB 572 cut the corporate tax rate from 9.6% to 9.3% and increased the corporate minimum tax for the first time in 20 years.  “The American Federation of State, County, and Municipal Employees (AFSCME) found that after tax reform, California had the most progressive income tax of all states in the country.” [5]

AB 800 (1987)

Provided for the purchase of the Chabot Ridgelands in Castro Valley to create the Fairmont Ridge Park as part of the East Bay Regional Park District. [6][7]

AB 3707 (1988)

Landmark legislation providing for background checks and waiting periods for the private party transfer of handguns.

AB 376 (1990)

This landmark legislation banned multi burst trigger activators and bump stocks on firearms in California. In 2017, Las Vegas was the site of a mass shooting killing 58 people where the shooter used firearms with bump stocks.  28 years after the passage of AB 376 in California, “bump stocks were banned by the U.S. Justice Department in December 2018, with the regulation in effect as of March 2019.” [8]

AB 851 (1992)

The U.S. Supreme Court was scheduled to hear the case of Nordlinger v. Hahn- a challenge to California’s Proposition 13 (1978).  County tax assessors announced that they would force California property owners to pay millions of dollars in back taxes if the Court overturned Proposition 13. This bill prohibited assessors from assessing any back taxes in case the Supreme Court overturned the measure.

AB 34 (1993)

Reformed California’s Net Operating Loss (NOL) law with the support of California’s business community.  The measure reduced the carry-over period for NOLs from 15 years to five years for existing corporations.  The bill also provided that new companies could carry forward 100 % of any losses generated in their first three years of operation, and that existing firms with less than $1 million in revenue could carry forward 75 % of their losses.  AB 34 eliminated the sunset for NOLs and made the provisions permanent.

AB 2728 (2006)

Provided a major overhaul of California’s assault weapons ban. The bill clarified that the possession of a lower receiver of an assault weapon is equivalent to possession of an assault weapon. Additionally, the legislation provided that the illegal possession of any assault weapon or .50 caliber BMG rifle is a public nuisance and provided destruction of the weapons upon confiscation.

Klehs is one of those unique individuals who can blend the focus of public policy and political strategy. In the 1992 election cycle, Assembly Speaker Willie Brown appointed Klehs as Chair of the Assembly Democratic Campaigns resulting in a 48-32 Democratic over Republican majority for the 1993-1994 legislative session.

Board of Equalization

1995-2003
California State Board of Equalization (BOE)

Board Member

In 1994, Klehs was elected as a Member of the California State Board of Equalization (BOE) serving from 1995 to 2003.  His district included the 26 counties of Northern California.  Klehs’ philosophy at the BOE was “Treat taxpayers like customers, not as sources of principal, interest, and penalties.”  In January 1995, he was elected Chair of the Board on a bi-partisan unanimous vote.  As Chair of the Board Klehs also served as a Member of the California Franchise Tax Board.

 

As a state constitutional agency, the BOE was responsible for administering, enforcing, and collecting the $41.3 billion in sales and use taxes, alcohol taxes, tobacco taxes, environmental and other fees.  The Board serves as assessor for state’s 400 utilities and railroads.  The BOE’s three major areas of responsibility were tax administration, the state’s tax court, and tax enforcement.

Tax Administration

As a Board Member, Klehs had responsibility for the BOE’s $319.9 million budget and 3,800 employees. In his first year, he led an efficiency drive closing 50% of local offices- saving $10 million, initiated performance audit saving $15 million over five years, and $5.7 million personnel savings. Klehs created the BOE’s Customer Service Division - the first in state government. The BOE became the first state agency to be on the Internet and allowed for electronic filing of all taxes.

State Tax Court

Each Board Member served as one of five judges in the state’s only tax court. The BOE adjudicated over 2,000 cases annually, published over 75 formal opinions, and closed out an extensive case backlog.

Tax Enforcement

Klehs made fighting the underground economy a primary policy initiative.  During his tenure at the BOE, the agency collected over $4.1 billion in revenue from the underground economy.  In 2001, he initiated the largest U.S. raid against tobacco counterfeiters.  The BOE collected $98.8 million in labor code violations through the Joint Strike Task Force on the Underground Economy.

 

Russian organized crime in California was involved in diesel fuel tax evasion.  In 1994, while a Member of the State Assembly, Klehs and Senator Robert Presley (D-Riverside) co-authored SB 840.  The purpose of the new law reduced diesel fuel tax frauds by changing the point of collection from the retail pump to the terminal level resulting in net revenue gains of over $40 million.

On September 13, 1995, US Attorney Nora Manella and Klehs announced the arrest and charges against “13 Russian Armenian subjects of the Mikaelian Organization with racketeering, including multiple acts of mail and wire fraud, money laundering, extortion, and distribution of heroin and other narcotic controlled substances. The Russian Armenian group ran a black-market diesel fuel network that supplied gas stations and truck stops throughout Southern California. They defrauded the Internal Revenue Service and the California Board of Equalization through various fraudulent schemes, by purchasing millions of gallons of diesel fuel and avoiding a huge tax liability.

 

According to the US Attorney, this group managed to avoid paying $3.6 million in taxes in just one year. The arrests culminated a two-year joint task force investigation conducted by the Federal Bureau of Investigation, the Internal Revenue Service, the Los Angeles Police Department, the Long Beach Police Department, the California Department of Justice, the Department of Defense, and the Department of Transportation.” [9]

Franchise Tax Board

1995-1996, 1999
Franchise Tax Board (FTB)

Board Member

As Chair of the BOE, Klehs also served as a Member of the FTB during 1995-1996 and 1999. At the FTB, Klehs was responsible for:

  1. Administering, enforcing, and collecting the $51.5 billion in personal income tax and corporate income tax revenues for the State of California.
  2. Providing policy responsibility and direction for the $406.1 million state tax agency with 5,900 employees.
  3. In 1999, Klehs lead the FTB in its massive effort to collect $9.8 billion in delinquent child support payments owed by deadbeat parents. He co-sponsored legislation giving the FTB the responsibility to collect of back child support payments, collecting over $500 million. Klehs established free filing of income taxes on the Internet, established non-filer compliance project identifying 100,000 new non-filers, 50,000 erroneous filers, and generating $36 million in new revenue.

After Public Office

In 2006, Klehs entered the race for State Senate in the 10th Senate District. He lost the primary coming in second behind former Assemblymember Ellen Corbett (D-San Leandro) and beating former Assemblymember John Dutra (D- Fremont).

During 2003-2004 and 2007-2008, Klehs served as a lecturer in the U.C. Berkeley Department of Political Science and strategic advisor to the University Chancellor.

In December 2006, Klehs formed the Johan Klehs & Company, Inc., a government relations firm serving private, public sector, and organizational clients throughout the United States.

Klehs serves as a Board Member of the California State University East Bay Educational Foundation Board of Trustees.

Accomplishments

Honors and Awards

Klehs was honored eight times as "Legislator of the Year" by California groups including police officers, the disabled community, credit unions, the California Abortion Rights Action League and the California Teachers Association. In 2008, California State University named Klehs as their “Advocate of the Year.” In 2016, he was honored by the Los Angeles Museum of the Holocaust for authoring ACR 110 (1988) “in obtaining justice for holocaust rescuer Dr. Aristides Sousa Mendes in his home country of Portugal.”

Publications

As Chair of the Assembly Revenue and Taxation Committee, Klehs published the following tax guides and references:

  1. “2005 Revenue and Taxation Reference Book”, February 2006
  2. “No New Taxes on the Internet”, San Diego Lawyer Magazine.  September 2000.
  3. “1994 Revenue and Taxation Reference Book”, February 1994.
  4. “1993 Revenue and Taxation Reference Book”, February 1993.
  5. “1992 Revenue and Taxation Reference Book”, February 1992.
  6. “1991 Revenue and Taxation Reference Book”, May 1991.
  7. “1990 Revenue and Taxation Reference Book”, March 1990.
  8. “Bridging the Budget Funding Gap”, June 1990.
  9. “1989 Revenue and Taxation Reference Book”, March 1989.
  10. “Overview of California’s Income Tax Laws: The Personal Income Tax and the Bank and Corporation Tax as Enacted by AB 52 and SB 572”, November 1988.

Contact Johan

References

  1. Assembly Daily Journal, February 14, 1984, Auditor General Audit # 414, “Pesticide Registration Element of the Pesticide Regulatory Program Administered by the California Department of Food and Agriculture.”
  2. “Change From Within”, by:  Michael S. Munoz. Pilebutt Press, Placerville, CA.
  3. Engineering News, “Legislators call for new contractor on I-580.  Rail Roadway files for bankruptcy.”  December 1986.  https://www.oe3.org/wp-content/uploads/2016/03/12-1986-december-engineers-news.pdf
  4. Engineering News, “Court ruling knocks out non-union contractor”. March 1986. https://www.oe3.org/wp-content/uploads/2016/03/3-1986-march-engineers-news.pdf
  5. “Overview of California’s Income Tax Laws:  The Personal Income Tax and the Bank and Corporation Tax as Enacted by AB 52 and SB 572”, November 1988.
  6. www.savechabot.com
  7. “Castro Valley”, by: Lucille Lorge, Robert Phelps, and Devon Weston.  Arcadia Publishing, 2005.
  8. “2017 Las Vegas shooting”, www.en.wikipedia.org
  1. Federation of American Scientists, “Russian Organized Crime Activities in California.” https://fas.org/irp/world/para/docs/rusorg4.htm