Sometimes when you read about the discussions taking place within Sacramento’s political class, you just have to shake your head.  It has been widely reported that Governor Brown is planning on asking the legislature, in some bipartisan fashion, to place on a special election ballot an extension of the largest tax increase in the history of California (or any state, for that matter).  If there is a little deja vu factor here, that’s because this has happened before in the not-so-distant past… 

In 2009, in what has been characterized as the worst political move in state history, the Governor and the legislature first enacted what was called a "temporary" increase in income, sales and car taxes (yes, Virginia, right in the midst of a recession when families are trying to make ends meet on tight budgets).  These taxes, it is estimated, sucked about $1,500 annually for two years from every family in the state, to provide about $15 billion in additional tax revenues to state government.  In addition, in this same terrible "deal" for taxpayers, the legislature also placed on a special election ballot a two year extension of these same taxes.  A supposed "sweetener" for voters was the enactment of a so-called "spending cap" measure if they would simply vote to tax themselves for a couple of more years.  Taxpayer advocacy groups like the Howard Jarvis Taxpayers Association and the National Tax Limitation Committee led a strong public awareness effort that exposed that "spending cap" as a fraud, and made sure that voters were prepared to reject this attempt by the legislature to gauge taxpayers to cover for their overspending.  The results of the vote on the extension of the "temporary" income, sales and car taxes were overwhelming and definitive: 34.6% yes to 65.4% no.  It is also worth noting that not one of the six Republicans who voted for the tax increase, or placing an extension of those tax increases on the ballot, are in the legislature anymore.

Prudent preparations by the Governor and the legislature should begin with the understanding that at the end of this fiscal year, June 30, 2011, the temporary tax increases will sunset and go away.  Instead, it appears that a Governor Brown and the Democrat-controlled legislature are totally captive of two terrible influences — firm control by the state’s public employee unions (and the millions of dollars they spread around through their political action committees)  — and a socialist ideology espoused by many who cling to need to redistribute wealth with all of the passion of religious zealotry.  They refuse to "let go" of the temporary tax increases, and want to vote to extend them for some length of time.  According to press accounts, their plan is to put forward a state budget for the new fiscal year 2011-2012 that contains "draconian" cuts and then give the voters the "opportunity" to vote to tax themselves for the purpose of sparing the "worst" of the cuts.

Enter the "Washington Monument Strategy" which was succinctly described by then-Assemblyman Sam Blakeslee in a 2008 FlashReport column:  "When budget times are tough in Washington, D.C., government agencies are asked what they can do to trim spending.  In an effort to preserve their existing spending levels, they threaten to close the Washington Monument.  They believe that if they can cause enough public outrage they can protect their department from cuts or get lawmakers to raise taxes."

Instead of Governor Brown and legislature focusing on rational (albeit difficult) budget for next year that presumes state revenues that do not include tax increases (newsflash: extending a tax increase that is set to sunset is a new tax) — they are going to try to scare and intimidate voters by putting forward cuts that they would never put forward except for the purpose of extorting votes from the public.  Keep a special eye out for massive cuts to public safety, corrections, and core government functions. 

In the meantime, what will we not see?   Don’t look for current public employees to voluntary end their often lavish defined benefit pensions, instead going to 401-k style plans to mirror the private sector.  Don’t look for an end to collective bargaining rights for public employee unions, which are so costly to taxpayers.  Don’t look for any meaningful privatization proposals — for prisons, universities, schools or anything else.  Don’t look for a permanent scaling back of the state’s social welfare programs.  Don’t look for the voters to get a chance to repeal ballot box budgeting measures like Prop. 98, or for a chance to vote to repeal all of the boondoggle bond measures like High Speed Rail and the like.  Don’t look for legislators to end their taxpayer-funded vehicles (two of them), even though no other state legislators nationally enjoy such a perk.  How about reforming the draconian California Environmental Quality Act (CEQA)?  What about repealing the expensive AB 32 regulations that are already a de facto massive tax increase on Californians?

So the question is whether or not there is a single Republican in the State Capitol, let alone a handful, that will vote to put taxpayers through the rigors of another statewide special election to vote on tax increases — when the union bosses and the left-wing ideologues will not consent to real, meaningful reforms to ensure that in times of plenty we won’t be back at the trough (oh, a  "spending cap" ballot measure is already headed to us in a future ballot, courtesy of the last budget deal — no doubt as flawed as the one before voters in May of ’09).  Frankly, at this point, a conservative in the legislature needs to ask themselves a serious question — "Is there any reform of state government worth putting higher taxes before voters again?"

In closing, if I am Governor Brown and the Democrats, and I am serious about wanting to ask the public to vote new taxes on themselves, then go ahead and gather the signatures to place it on the ballot.  According to experts in whom I trust on these matters, with a friendly Attorney General, Secretary of State and a cooperative legislative analyst (and a pile of money which I’m sure the California Teachers Association alone would provide), you can get a measure qualified and call a special election for just over 200 days from now — about seven months.  That puts you in mid-July.   State Democrats can proudly call this their plan to rescue California, and you won’t need a single Republican legislator to aid you — you can take all of the credit for extending the taxes if the measure passes, and take all of the blame and wrath of the voters if they, as I predict, stick a fork in your idea.

This entry was posted on Monday, January 3rd, 2011 at 12:00 am and is filed under Blog Posts.