Today we are pleased to feature this guest commentary from Jon Coupal, President of the Howard Jarvis Taxpayers Association…
Shades of Gray Davis
The State Capitol is hemorrhaging red ink. The non-partisan legislative analyst’s office (LAO) has released a report showing that the revenue shortfall from the budget just passed in August could exceed $10 billion. Fortunately, the governor and the Legislature established a modest $4 billion reserve or the deficit would be much higher.
How did we get into this mess? If this seems like déjà vu all over again, you’re right. It’s been just seven years since then Governor Gray Davis, who inherited a budget surplus, began to run up massive state deficits which were largely responsible for his being recalled. Moreover, he was replaced by a candidate who stressed, "Living within our means."
Simply put, the tax and spend crowd — meaning the majority in the California Legislature — aided and abetted by some like thinkers in the governor’s office, put on their rose colored glasses, clicked their heels three times, and hoped for the best. The budget signed a mere three months ago includes a mass of generous assumptions that have failed to pan out. Examples include: the billion dollar sale of EdFund, a student loan program (which, if it is sold, may only collect $500 million) and increased property tax revenue, which failed to take into account a declining housing market and glut of foreclosed properties. Additionally, the LAO has been exceedingly generous in predicting the state’s general fund revenues will grow about 3.5 percent this year. If that fails to materialize, the $10 billion hole may double. Of course, all this comes on top of recently approved bond debt of nearly $50 billion (which amounts to nearly $100 billion after interest payments) and another $50 billion in unfunded pension liabilities.
Already there are rumblings by the usual suspects that we must raise taxes. The LAO has suggested, among other strategies, eliminating the mortgage interest rate income tax deduction. For ourselves, we fail to see the wisdom of adopting a policy which will take a housing market which is already declining and put it into free fall. Sadly, many of the recommended "revenue enhancement" options don’t seem to touch on the root of the problem which is unconscionable overspending by an irresponsible Legislature and a sometimes complicit governor.
**There is more – click the link**
December 14th, 2007 at 12:00 am
Shades of Gray Davis? I challenge anyone to truly distinguish between the two, at this point in time
December 15th, 2007 at 12:00 am
Ah yes, the Howard Jarvis Taxpayer’s association. The same people who supported Los Angeles County’s Proposition BBB. Yep, that fraud of a tax-raising initiative which was supposed to deliver world-class schools to L.A. Voters was an abomination. Thanks Howard Jarvis Taxpayers Association!
If memory serves me, they also supported Arnold, our current liberal governor.
When will the Republican party purge itself of the dead-weight?