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February 16, 2009

CA's Budget Problem Is Paragraph 10

-- by Dave Johnson

This post originally appeared at Speak Out California

Today's San Jose Mercury News front page story is about California's budget problem: that they are still one vote short. But Californians reading the story are not told why one more vote is required, not are they told who it is required from -- until the 10th paragraph. The 10th paragraph reads,

The votes were there in the Assembly. But in the Senate, only two Republican senators were prepared to buck party orthodoxy and vote to raise taxes. Three were needed.

Even in this 10th paragraph readers are not informed that every Democrat is voting for the budget.

Before this paragraph, readers are told that "lawmakers" cannot agree and that "the deal still was held hostage by the thinnest of margins." But there is nothing telling them who or why.

The reason this is such a problem is that the people of California need this information, to help them play their part in the functioning of our state government. The voters need to know who to hold accountable or they will not make their wishes known through calls to their Assemblymember's or Senator's office. And they can't make informed decisions at election time.

This is typical of stories about the budget impasse -- across the state the major newspapers, radio and TV stations are not giving the voters the information they need in order to participate in their government. The result is that the state is becoming ungovernable -- and going broke.

So let's be clear about what is happening here. California's elected Republicans have all signed a "no-new-taxes" pledge with Grover Norquist's organization. (He's the guy who says the plan is to make government small enough to "drown in a bathtub.") So now they see the budget crisis as an opportunity to force mass layoffs of state employees and reductions in support for people who need things like state-supplied oxygen tanks. They call that "reducing government." And even with all the budget cuts that the Democrats have all voted for, they still will not vote to pass a budget. They want more, and then more, and then they want the state government to go away.

This is ideology. They repeat an ideological mantra that will ruin the state. And they say this is their goal -- to get rid of government. They say government is bad. They say government spending is bad. They say taxes are bad. They say corporations are good. Ideology.

California can not continue to fund our schools, universities, roads, public safety, firefighters, health services, services to the poor, blind and elderly, provide funding for local government, etc. without additional revenues. Do the Mat (George Skelton, LA Times):

It's Republican dogma in the Capitol that to vote for a tax increase is "career-ending." Even if true -- and there's evidence both ways -- so what?

These are folks, after all, who sermonize against making politics a career, publicly pretend to worship term limits and preach the virtues of private enterprise. You'd think they'd be eager to return to the private sector. Yet, they're afraid to risk losing out on their next political job.

Another item not reported is that the Republicans demanded a huge tax cut for large corporations -- the very kind that are killing off California's smaller independent, job-creating businesses.

And they still won't vote for the budget. And the public still doesn't have a chance to learn what is going on here.

Click through to Speak Out California

Posted by Dave Johnson at February 16, 2009 11:08 AM


Comments

WSJ Feb 18

quote
......
But the plan is still far short of the radical tax and spending surgery the state needs. It's loaded with short-term gimmicks -- such as $5 billion of borrowing from future lottery receipts and nearly $10 billion in one-time federal stimulus cash. Even proponents concede the plan doesn't balance spending and revenues 18 months from now.
[Review & Outlook]

The tax increases will continue to chase even more productive people out of the state. For at least two years, the sales tax would rise by one percentage point to 8.25% and the income tax by 0.3% to a top marginal rate of 10.56%. These will both be the highest statewide rates in the nation (see chart).

Do these taxes hurt business? Ask Hollywood. Film makers are threatening to flee to avoid the state's high costs, so to keep them in Southern California the deal offers $500 million in tax breaks for producers. Rich liberals like Rob Reiner, who love higher taxes on other people, get a sweetheart tax break and everyone else pays more.

Mr. Schwarzenegger is finally getting a constitutional state spending cap that will be on the ballot in the next election, but even that is flawed. This cap would limit spending hikes in any year to a rolling average of the percentage increase of the past 10 years. Nice idea, except that if Californians vote yes, the higher income and sales taxes automatically kick in for three more years. So to get a modicum of spending restraint, the voters have to agree to tax themselves by $25 billion more for three additional years. Californians can be forgiven if they say "no deal."

The tragedy of this gamesmanship is that the political class still won't address the root cause of its financial problems, which is that the state is becoming less economically competitive. California businesses and high-income families already pay a surtax for locating inside the state. The new budget deal raises that tax toll higher still.

It's no surprise that most CEOs we talk to, many of whom live in California, say they'd be foolish to build another plant in the state. California's budget crisis is the inevitable result of runaway liberal governance, and the state's voters will keep paying for it until they reduce their tax burden and adopt more radical spending controls.
unquote

Posted by: Mace [TypeKey Profile Page] at February 18, 2009 4:19 AM

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