From today’s Wall Street Journal Political Diary E-mail…

Purified by Fire

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There are a lot of problems with the Big 5/Big Taxes plan — some of which are a function of a broken process. The super secret-squirrel negotiations result in a scrambling of speedy analysis, trying to figure out what is really in the package.

State Senator Bob Dutton, who ironically is the Vice Chairman of the Senate Budget Committee, like everyone else has been scrambling to look into the details of the plan, having had it sprung on him just like everyone else.

One interesting analysis that his staff did was they looked over the stated $15.1 billion in cuts in the plan. Guess what they found? Yep, State Capitol "double speak" is alive and well.

Attached is a document (excel format) that details the sad truth, which is that if you apply the traditional "normal" definition of cuts (you know, were we actually reduce the amount of money on a program, as opposed to "cutting an anticipated increase" — or how about calling cuts items that have to be paid back?

Anyways, by the take you take out the "cuts that aren’t cuts" — the real cuts in this package are only $3.1 billion —… Read More

Republican Insurance Commissioner and Gubernatorial candidate Steve Poizner sat down with reporters with the Sacramento Bee this morning. He made a common sense suggestion on how to keep the state from going insolvent without ANY tax increases. Rather than pursuing an 18 month solution, perhaps we should look more short term, so that we don’t have to raise taxes? A novel thought.… Read More

Kudos to CalTax for picking up on the Board’s reluctance to give up extra resources with regard to the new Flavored Malt Beverage regulation (link).

When we adopted the regulation last year, over my objections, the Board told the Department of Finance to expect $38 million in revenue for the fiscal year. As I warned repeatedly, it turns out the regulation is unenforceable and easily dodged.

The companies this regulation sought to punish simply changed the formula in their products so they no longer contain distilled alcohol. As a result, year-to-date, the state has collected only $6,000 of revenue. (Yes, that means our expert revenue estimates were off by 6,333%) To gear up to collect this tax we asked the Department of Finance for more money. Finance now understands how ridiculous this tax is and they want the BoE to completely withdraw the request. I agree with Finance. With a hemorrhaging state budget this should be a very simple decision to save the state money.

The BoE is asking for $1,328,000 (General Fund) in Fiscal Year 2009-10. Now that we… Read More

Today GOP Gubernatorial aspirant Meg Whitman gave the first of three major speeches she intends to make this week. With all of the politics taking place in Sacramento right now, I don’t really have much time to cover and analyze her remarks — right now. We’ll be able to pivot back to 2010 politics soon enough (Whitman conducted a couple of interviews with newspapers that are certainly worthy of commentary).

Whitman spoke today in the Silicon Valley (which she would know well) at the Tech Museum of Innovation in San Jose. I have attached below a link to her speech. If you’re following this primary, you should read it — as it is Whitman’s first major address as a candidate.

Ironically, I was last at the Tech Museum a couple of years back, to attend the swearing-in ceremony of newly elected Insurance Commissioner Steve Poizner. How poetic. (*Note,… Read More

Given that Senate Republican Leader Darrell Steinberg has lectured his colleagues to "bring their toothbrushes" as a statement of his willingness to "lock down" the State Senate until somehow, out of pure physical exhaustion, he can gather votes for his major tax increase (good luck) —members of the State Assemblyare well prepared if Speaker Karen Bass follows uses the same sort of strong-arm tactics the legislature’s lower chamber.

Assemblyman Bill Emmerson, an orthodontist by profession, has provided his Assembly colleagues with toothpaste and toothbrushes.

In a note with his small gift of hygiene products to his colleagues, Emmerson wrote, “I hope this small tube is enough to get you through these trying budget negotiations.”… Read More

This morning we praised Senator Cox as being one of 13 GOP Senators who are keeping every family in California safe from billions in new taxes. Now the word is that he is in heavily, unilateral negotiations to try and “strike a deal” — not good. Republicans united can move forward a no taxes plan, such as the one simply articulated by Steve Poizner today. Senator Cox, please help Republicans reject this plan!… Read More

Our esteemed editor Jon Fleischman posted a John Fund commentary on the state budget crisis, in which Fund mentioned speculation that Darrell Steinberg and Karen Bass might pass a tax hike on a majority vote.

I say: please, go right ahead. Not only would it be declared unconstitutional, but California voters would be presented with an enormous, purely Democratic tax hike.

I’m all for clarity, and in this case such a rash action by Bass and Steinberg would make it crystal clear to California voters that the Democrats are the party of higher taxes, the party of raiding working family budgets rather than restraining the state spoending spree.… Read More