At some point we have to say, “stop the madness, stop the presses, just plain stop.” As many predicted, California has spent itself into oblivion. As a result, the Capitol is now besieged by onslaughts of the spend more-tax more crowd. The halls of the Capitol are swarming with specialist interest groups, lobbyists and citizens, all who are equally passionate about securing their share of a shrinking budget pie. But, there are few who come to the State Capitol to stand in the gap for those who cannot be at the Capitol from daylight until dusk – the taxpayers, the ones who pay the bills. Who comes calling to represent their interests?
The Legislature keeps telling the taxpayers that we just need a little bit more of their money – money the citizens need to pay their mortgages, buy food, pay for utilities, and save for retirement. Two years ago, the Legislature approved what was termed a temporary tax increase to fill the state’s gaping budget hole and, in May of 2009, the voters were asked whether they were willing to extend these “temporary” taxes an additional two years. The voters rejected Proposition 1A 65% to 35% – a two-to-one margin.
Now with those taxes expiring, the spend-it-all-and-tax-them-more crowd is clamoring for more. This time “temporary” means five years. The new mantra we will hear is, “This is not really a tax increase; it’s an extension of taxes we’re already paying" or, "the public is used to them.” (Ask them if they are used to it.) I can virtually guarantee that the cry for more will be even louder after another five years. These taxes have real-life impact and cost the average family of four about $1,500 more a year.
Republicans have met with Governor Brown and Democrat legislators to seek real reforms. We’ve suggested real spending caps, pension reform, eliminating costly and burdensome regulations. We’ve put our ideas on the table, only to be ignored or have them blocked. Who is the real party of “No”?
Instead, Governor Brown is asking us to believe that this time things will be different – burdensome taxes will help our state’s economy and balance the budget – despite the fact that tax increases two years ago have led to nothing but a drop in state tax receipts. In fact, the Governor’s own budget projections predict more deficits and increased spending down the road. Simultaneously, ongoing calls for aggressive regulatory reform continue to fall on deaf ears, though we know that vigorous economic opportunity is the lifeblood of California’s long-term prosperity. Right now, California has the second highest unemployment rate, ranks third from the bottom in employment growth and Chief Executive Magazine continues to rate us as the most anti-business state in the nation.
There is no doubt that the state will continue to struggle until we can demonstrate that California means business. New jobs mean less unemployment, increased consumer spending, and new revenue to support state services. What’s not to like?
Speaking of reform, California’s under-funded retiree expenses cost California’s taxpayers close to $6 billion this fiscal year, consuming close to 7% of the General Fund. However, this severely underfunded liability isn’t even on the table and there is no reason to believe that the tax-raisers will stop asking for more. Legislation has already been proposed to impose new taxes on sodas, tobacco and probably other tax increases yet to be discovered, not to mention a litany of costly new regulations. These are not budget items, but they point to an insatiable appetite for more of taxpayers’ hard-earned money.
Anyone that can do arithmetic can see we have a need for reform; it’s a matter of when will there be enough like-minded legislators and enough public opinion to turn that corner. I joined the Taxpayers’ Caucus as a public statement of conviction, recognizing that, in the Capitol, the voices of those who pay the bills need to be heard above the clamor of those who will spend every dime – and then some.