Sacramento Democrats, desperate to avoid the kind of reduction in the size and scope of state government in California that are needed to balance the state’s books, are unbelievably still pursuing tax increases as a "solution" to chronic overspending, and a tax code that is predictably volatile as it disproportionately taxes the income of California’s wealthiest citizens.

In yesterday’s Los Angeles Times there is a story about how Democrats are supportive of a $1.50 per pack increase in cigarettes which, according to their analysis, would result in a $1.2 billion increase in tobacco tax revenues to the state’s general fund.

This is a stupid idea. As we have pointed out many times, Californians are among the most overtaxed people in the entire country, and the last thing we need is higher taxes, frankly, on anything. Never mind the fact that this takes us back down the path of the "sin tax" where all-knowing politicians in Sacramento hoist taxes on activities that they decide are "bad" for our collective community. Ironically, of course, taxes like these… Read More

The California Supreme Court has ruled 6-1 that Proposition 8 was a valid amendment, rather than revision, to the state constitution. However, in a concession to Proposition 8 opponents, the 18,000 same-sex marriages that occurred last summer will remain "legal.” The web site for the opinion has been so overwhelmed that even thirty minutes after its release, many are still unable to read the opinion. This is certainly a victory for the democratic process here in California. More analysis from FR will follow… … Read More

For anyone who has actually been following this little series, you will note that I have not yet even talked about government expenditures yet. That is because I believe that, to solve the budget problems in this state, we need to completely rethink how we do budgets.

(1) First focus on history–see where we have been, what has occurred, how we got here. Government budget analysts never look back, they never analyze how they ended up where they are. As a result, they never know where they have been and consequently don’t really know where they are going

(2) Focus on revenue first. Government revenue, as we all know, is dependent on the private sector. As p. 69, Figure REV-03 shows, those earning between 0 and $50,000 a year constitute 65% of the taxpayers, yet generate less than 5% of the revenue to the state. Those who earn more than $50,000 a year are 95% of the state’s revenue. A solution must focus on attracting more people to the state who earn more than $50,000 a year. A quick question–will raising taxes on those folks attract more of them, or encourage them to leave? And if they leave, how will that affect… Read More

One of the most frequent recipient of the FlashReport’s Golden Pen Award is scholar, professor, columnist and radio talk show host Dennis Prager. Prager has just released his first "Prager University" video on You Tube. Did you know that the key to the uniqueness and greatness of America can be found on the front and back of a penny? … Read More

If there is any problem with government budgeting, it is how the government budgeting analysts approach their job. They always (not sometimes, not once in a while, not even frequently, but always) start the budget discussions with what they spent last year on a program by program basis. Take a look at the Governor’s Budget Summary I referenced in my last post on this item. Go to the Table of Contents. The first substantive item? 38 pages of "Summary of Major Changes by Major Program Area," summarizing how much the change is spending on each program area is. There are then 8 pages of "Economic Outlook," recognizing that government revenue is based on growth and activity in the private sector. Finally, on page 63 of an 85 page document, the analysts discuss revenue. Finally.

Want a real budget solution? Talk about revenue first. Analyze why revenue is dropping. Is it a "general economic malaise? Is it a government induced recession? Are government policies toward the private sector inhibiting private economic growth? What things can government do to enhance revenue growth in the private sector, thereby increasing… Read More

Everyone talks about solutions to the budget. I want to put a few out there based on real numbers. The first thing to do is to look at real numbers, from an historical perspective, to determine what to do. Our left wing friends don’t want to look at real numbers, and the moment anyone starts talking about those numbers, people everywhere start falling asleep, so I am going to try to make this short, and deal with the budget in light of those numbers. This analysis will be in several short blog posts, but it is a good place for any one to start.

The first thing to do in any budget analysis is to go to Schedule 6 of the Full Budget Summary available on the Department of Finance’s website here. Go to that page, and download the .pdf file. Go to appendix 13, to which is attached Schedule 6). It is titled Summary of State Population, Employees and Expenditures. It shows a detail of the growth of state government since the 1950-51 budget year.

To put this summary in perspective, look at the numbers. Between 1958 and 1974 (Governors Pat Brown and Ronald Reagan), this state… Read More

I had an opportunity last week to chat with GOP gubernatorial aspirant Tom Campbell. The former Congressman has a lot of ideas — I asked him to put some of his thoughts into written form for FlashReport readers….

As the ‘post mortems’ have been written about the massive defeat of all of the substantive measures on Tuesday’s special election ballot, most credible observers of California politics have concluded that a large part of the reason that the measures lost is that to the electorate, they represented the results of a consummate “insiders game.” There is no doubt in my mind that these measures, which were more or less designed to try, as best as possible, to maintain the status quo in Sacramento by patching together a number of disparate and, frankly, ill-conceived policy ideas that seemed to have as their one common theme the appeasement of the interest groups that dominate the politic scene (and political financial giving) in state politics.

Voters should be aware of the fact that while they have dispatched most of the terrible ballot measures produced by last February’s ill-fated budget deal, that resulted in massive tax increases but did nothing to solve the state’s structural budget troubles, that there is one more “gift” from Capitol insiders – it is commonly referred to by its proponents and by the main stream media as an “open… Read More