TO:    Members and Friends, Howard Jarvis Taxpayers Association
FROM:  Jon Coupal, President
SUBJ:  California State Budget

Yesterday, the Governor released his "May Revision" of his earlier budget proposal. The "May Revise," as it is called, takes into account more recent financial considerations of which our political leaders were unaware back in January.

HJTA has several concerns about the Governor’s May Revise. First and foremost, it reflects another failure by projecting a level of spending in excess of revenue. The fact is, the taxpayers of California have done their job — and then some. You have provided political leadership with billions of dollars more than just a few years ago. In fact, general fund spending has about doubled in just ten years, from $50 billion to $100 billion. It may be a worn-out expression, but it is fundamentally true: California does not have a revenue problem, it has a spending problem.

The Governor proposes to close much of the gap, not by reducing expenditures to the level of revenues, but by, once again, borrowing money. This time, there is a complicated proposal involving "securitizing" the revenue stream from the state lottery, in the form of bond debt. This must be approved by voters. The bad news is that there would be a trigger mechanism which would impose a sales tax increase if the voters failed to approved the lottery proposal.

We strongly object to any proposal which threatens Californians with a tax increase if they fail to approve some other proposal.

I had several meetings yesterday with Legislative leaders whom I believe to be fiscal conservatives opposed to tax increases. What they told me is that there is great skepticism about the Governor’s spending plan and that it is unlikely that the budget would garner the requisite two-thirds vote in the Legislature needed for passage.

In the meantime, know that your executive, lobbying & legal teams at HJTA are monitoring the budget process very carefully to protect YOUR interests and the interests of all California taxpayers.

This entry was posted on Thursday, May 15th, 2008 at 12:00 am and is filed under Blog Posts.