When the economy is hurting, it means that most people are having a tough go of it.  Families who are managing tight budgets are doing everything they can to make every dollar stretch further.  Of course, as we know, when California residents are less prosperous, that adversely effects the amount of taxes generated for government use.  If your income is less (or nonexistent), that means you are paying less (or no) income taxes.  If you have less money to spend on buying things, then you are generating less sales tax.  It’s not a difficult situation to figure out.  It falls on the shoulders of our state’s policymakers — the Governor and 120 state legislators, to address the consequences of shrinking tax revenues.  But as we have seen in a state budget calamity that has been going on for year, Democrat politicians in California have been unwilling to implement billions of dollars in savings — even when those savings have been laid out in front of them, providing an actual road map towards saving vast sums of taxpayer funds.

We have seen recommendations in the form of findings from state audits, reports from grand juries, recommendations from the Legislative Analyst’s Office, and of course Republican legislators have made significant recommendations over the years that have been largely dismissed by the majority party.

Given the gravity of our current situation, and the fact that asking Californians to raise taxes in the midst of a recession is likely a fool’s errand, it is remarkably well timed that the California Taxpayers Association (which is affiliated with the California Chamber of Commerce) released a report this week that puts these money-saving ideas back on the table, to remind the politicians that there are alternatives to calling for tax hikes when the budget is in the red.

CalTax went through a decade’s worth of recommendations made by a variety of groups, and its report (Government Cost Savings Report: How State and Local Government Can Increase Efficiency and Become More Effective) includes those that the association calls “tangible ideas that can be molded into legislative solutions.” The recommendations would save state and local government about $4 billion, and would generate more than $3 billion in new revenue.

When I read the reference to “new revenue,” I got a little worried. After years of Democrat politicians and Arnold Schwarzenegger s trying to sugarcoat massive tax increases by calling them “revenue generators,” “fees,” and other euphemisms, I thought this might be more of the same. But it’s not. CalTax’s recommendations would create new revenue from things like selling advertising on school buses and government Web sites, improving the performance of the California Lottery, and allowing companies to invest in extended-reach oil drilling (which would generate revenue from existing taxes, and also would create many new jobs).

Another recommendation would raise money by making the Franchise Tax Board, Board of Equalization and Employment Development Department more effective at collecting taxes that are already owed. These agencies are incredibly aggressive when going after taxpayers – especially businesses – but this doesn’t mean they are effective. Together, they are owed $23 billion in uncollected taxes. Some of this money is just flat-out uncollectable (like when a person dies and leaves nothing, or when a business goes bankrupt), but some of it could be collected if the state made it a little easier for taxpayers to catch up on their bills.

The problem is that instead of making it easier, the tax agencies make it more difficult than necessary. If you want to make installment payments, for example, they won’t allow it unless you pay electronically! (Whatever happened to “legal tender for all debts, public and private”?) The CalTax report suggests that the tax agencies be more flexible, and that they even forgive interest and penalties in some cases in order to collect more of the $23 billion in owed taxes. If this is only 10 percent successful, it would yield $2.3 billion, CalTax notes.

On the savings side, the recommendations include a lot of common-sense ideas that the politicians should have insisted on long ago. Like cutting the 1,500 Caltrans positions that the LAO says are unneeded. And using competitive bidding when hiring court security. And eliminating Community College fee waivers for students who fall below a 2.0 GPA for two consecutive terms, or fail to declare a major, so the total amount of Community College fees waived will no longer exceed the amount collected.

Now as a conservative ideologue, I could probably throw out vastly more savings to be had than just those outlined by CalTax.  For example we could stop state funding of any sort that benefits criminal aliens, or perhaps stop paying women to have terminate pregnancies, and I can think of entire state agencies that I would like to shut down.  But the folks at CalTax took a pragmatic approach to putting proposals before the legislature that should not create a partisan battle, but rather should be a lot of “no brainer” savings for state and local government.

CalTax really did an outstanding job with this report. Instead of hitting us with more big ideas for massive tax hikes, Governor Brown and the Democrats need to read this, and then enact the recommendations to eliminate waste and improve efficiency.  Waiting for tax increases to go before the voters that likely will fail is no solution.  And it seems to me that ideologically liberal legislators, intent on preserving a “social contract” for all Californians, should be falling all over themselves to enact these changes, and try to preserve more of the social services spending in which they passionately believe.

I suppose a cynic would just put this new CalTax report in the same category of the now-ancient California Performance Review report, back when newly minted Governor Schwarzenegger ordered a top-down review of all aspects of state government and recommendations for cutting state spending.  Issued, reviewed by the legislature, and ignored.  But given the severity of the current fiscal crisis in Sacramento, legislators are well advised to study this new report very closely.  And perhaps start implementing it’s recommendations.

This entry was posted on Wednesday, April 25th, 2012 at 12:51 am and is filed under Blog Posts.