We are pleased to present this exclusive commentary from Republican State Senator John Benoit…
1A – A Taxing Proposition
By Senator John Benoit
I have long been an outspoken advocate of a real state spending cap that would firmly limit the growth of state spending to the sum of inflation and population growth. I proudly co-authored Assembly Constitutional Amendment 19, a fiscally-responsible measure that would have capped state spending while diverting any extra revenue into reserves and repayment of outstanding debt. Sadly, that measure died during a typical party line vote in the Budget Committee in August 2008. As with several other similar past proposals, the tax-and-spend controlling majority wanted nothing to do with anything that might constrain the growth of government.
So it was with some excitement that I anticipated the spending cap that emerged from last month’s excruciating budget negotiations. Unfortunately, the cap that evolved is seriously flawed. After carefully considering the potential value of Proposition 1A, I have concluded that the additional tax burden placed onto hardworking California families and job creators cannot be justified.
Proposition 1A attempts to limit the growth in State spending by tying it to growth in state revenues. However, if the legislature were willing to raise taxes the spending limit would also rise. Thus, a future Democrat controlled legislature would hardly be constrained.
Austerity is not a popular idea. Legislators like to spend money. Saying, “Yes” is so much more rewarding politically than saying, “No.” As a result, during periods of economic expansion, government programs grow with the unrealistic expectation that increased revenues will last forever. Legislators, particularly in a term limited environment, instinctively spend every dime available.
That’s why I have long believed that a real, no gimmicks spending cap, could be the only effective way to remedy reckless overspending. It would mandate some measure of economic sensibility by mechanically tucking away, in a rainy day fund, above average, boon year revenues. If it worked that way, we would avoid the down year budgetary fears of issuing tax rebate IOUs, early releases of thousands of criminals, and drastically slashing funds to schools and infrastructure.
Unfortunately, Proposition 1A’s passage is contingent upon an additional two years of tax increases. Given the likelihood that special interests or activist courts would once again find a way to get around this proposal, or that a future legislature could simply raise taxes and thereby raise the limit, the extra billions in taxes required to enact Proposition 1A make it a bad bargain for California.
What we really need is a legislature willing to tackle the root of our perpetual budget problems, by making real cuts in the size and cost of state government. That will be painful, but families, businesses, cities and counties and our schools, have all had to make much harder choices than we have been willing to make at the state level.
Let’s get to work right away to reduce the size of state government as well as the regulatory and tax burdens that make California one of the least competitive business environments in the nation. Growing our State’s economy, by creating jobs, is the only proven way to improve our economic viability.