Everyone who lives in a city or a county who drives or rides in a car (that’s about everyone) should be concerned about this. As I have previously reported, a proposal by certain representatives of the Administration has potentially misled legislators into believing it’s o.k. to vote to take the local share of the Highway Users Tax Account (HUTA) and Prop. 42 gas tax funds from cities and counties. The justification statement goes something like this: "Counties/Cities will be receiving American Recovery and Reinvestment Act of 2009 (ARRA-federal stimulus) funds anyways — which should be more than what we will be taking from Counties". This claim is misleading, to put it mildly. Take the case of San Bernardino County alone, which stands to lose (just for its unincorporated areas), 61% of what it costs to operate and maintain2,775 miles of roads. Thatis $47 million (HUTA take) and $7 million (Prop. 42 six-month deferral). The same unincorporated areas will receive only $5.8 million in ARRA federal stimulus funds. This means they’re planning to take ten times… Read More

The state budget will be voted on this week in Sacramento. There are unlimited options available to figure out how the state can spend the billions of dollars available to provide state services in California.

As a local government official I have strong feelings about the ways that make the most sense. People certainly disagree with me on some of these things and that is fine.

I am not going to argue about how stupid it is to raid Highway User Tax Act (HUTA) funds on the basis of what these funds do. That could be the subject of a whole blog by itself.

What I will argue is that a budget based on this transfer is not wise because it may not be legal.

Voting for this budget suggests confidence that it will be used as a document of proposed spending that will last for the next fiscal year. However, that just isn’t going to happen.

Prop 5 (1974) provided cities and counties greater control over these funds. This is money that can be used to pay off local bonds but not state bonds. See Section 19 of the State Constitution.

Whatever you think about HUTA funds and the… Read More

It goes without saying that if Democrats are engaged in budget negotiations, there is going to be another clandestine effort to sneak a tax increase into the final solution.

Senate Democrats are purportedly attempting to increase the current 5 cent deposit on small containers to 10 cents. What is the big deal with a measly 5 cents?

Since the smaller containers are approximately 88% of the beverage market, this increase would result in a $980 million additional tax on consumers.

A nickel will get you a billion, which is real money in budget discussions!

The reality is that the beverage container recycling fund has become insolvent because of borrowing for the state general fund. This is an absurd consequence caused by fiscal mismanagement, which again was not the fault of taxpayers.

The Senate leadership, along with environmentalists,is proposing the10 cent deposit as a way to avoid reductions associated with the beverage fund deficits and to generate more money for their pet causes.

The voters spoke clearly on May 19th. No more taxes! That includes another nickel a drink tax on nearly every soda, juice, and water that… Read More

This is a great presentation from Dr. Sally Pipes, President of the Pacific Research Institute, which is headquartered right here in California. Anyone concerned about the health care issue should take the time to watch it… … Read More

Word from all sources is that the confidential meetings of Governor Schwarzenegger, Senate President Darrell Steinberg, Senate GOP Leader Dennis Hollingsworth, Assembly Speaker Karen Bass, and Assembly Republican Leader Sam Blakeslee – with only their most senior staff members present – has resulted in the framework for a deal to balance the state’s current budget, which currently is projected to spend $26.2 billion more than the tax revenues coming into fund it.

The last time the so-named “Big 5” came to a budget deal, it was February and it was a raw deal for California taxpayers. Not only did the secret meetings results in well over $16 billion in higher sales, income and car taxes, as well as a families with children losing a key tax exemption – but that deal also produced the ill-fated Proposition 1A, which required “adult supervision” from California voters to reject any more tax increases to deal with the state’s fiscal woes.

As I look back at the terrible big budget/big taxes/open primary deal of February – one of the biggest problems with the deal was not even the terrible public policy within it, but the flawed “secret” process,… Read More

Word from all sources is that the confidential meetings of Governor Schwarzenegger, Senate President Darrell Steinberg, Senate GOP Leader Dennis Hollingsworth, Assembly Speaker Karen Bass, and Assembly Republican Leader Sam Blakeslee – with only their most senior staff members present – has resulted in the framework for a deal to balance the state’s current budget, which currently is projected to spend $26.2 billion more than the tax revenues coming into fund it.

The last time the so-named “Big 5” came to a budget deal, it was February and it was a raw deal for California taxpayers. Not only did the secret meetings results in well over $16 billion in higher sales, income and car taxes, as well as a families with children losing a key tax exemption – but that deal also produced the ill-fated Proposition 1A, which required “adult supervision” from California voters to reject any more tax increases to deal with the state’s fiscal woes.

As I look back at the terrible big budget/big taxes/open primary deal of February – one of the biggest problems with the deal was not even the terrible public policy within it, but the flawed “secret” process,… Read More

Apparently we are getting closer on agreement of a fix for the massive state budget shortfall. From what I hear, the deal does not include tax or fee increases, which is great news. That needs to be the first priority for budget negotiators as California taxpayers already are carrying too much of a burden with their current obligations to state government.

That said, I am wondering whether or not Sacramento politicians are tightening the proverbial belt enough. I recognize that trying to deal with a shortfall of over $26 billion is not an easy task. Especially for Sacramento Democrats who are either union-controlled and don’t have the latitude to make many needed cuts, or are liberal ideologues who would rather push California to the brink than see a decline in redistributive wealth policies.

The reason that I say this is that from talking to sources and reading newspaper reports, it would appear that borrowing and gimmicks will make up billions of dollars of “solutions” for this crisis. Current negotiations call for borrowing billions of dollars from local governments – which is a terrible idea (if raising taxes is the worst alternative,… Read More

Today, I am particularly proud of the candidate that I support for Governor – Steve Poizner. Steve was the only candidate running for Governor, from either party, who attended the meeting of Commission on the 21st Century Economy in San Francisco. The commission is responsible for reforming California’s tax system. After the meeting, Steve released a statement saying, “…there is one thing that is already very clear to me: we need to cut taxes in California. There is no better way to create jobs and grow the economy than through a tax cut and this will be a cornerstone of my campaign for governor.” I could not agree more. Increased taxes will not stimulate economic growth and they will not solve the budget crisis created by the irresponsible spending by the state. Steve spent years creating jobs as an entrepreneur in the Silicon Valley and he is the only candidate running for governor who has actually cut waste from the state budget — almost 15% at the Department of Insurance. I know that he is prepared to use his unique experience to tackle the tough issues and I cannot wait to … Read More