Word is Senator Maldonado has cut a deal, and the Senate Republicans are being briefed on it momentarily… Read More

With the State Senate adjourning for the night, a $14.4-billion package of outrageous tax hikes remains precariously close to passage. This got me thinking about how good a thing it is that California doesn’t have certain tools the federal government has.

Things like simple-majority legislative approval for tax increases, or its own currency. With control of money supply, the feds are currently preparing to try to spend our way out of a recession with money they don’t have. Of course California has tried that, in a way, by borrowing just to get by. This has resulted in postponing structural reforms to the point that California’s tainted credit will limit further borrowing.

So what other options does California have? Well, there’s tax increases, which are only an option when approved by the voters or two-thirds of the Legislature. Yet even the federal government realizes that increasing taxes can have destructive effects on a weakened economy.

The other tool California government still has is budgetary and governance reform. If state leaders had the will – inspired by the threat of bankruptcy perhaps – they could fundamentally… Read More

Freshman Assemblyman (and fellow FR blogger) Curt Hagman released the following statement about his stance on the staggering new tax increases in the budget proposal:

“California’s economy is in shambles. Businesses, jobs and taxpayers keep leaving the state. According to the Employment Development Department (EDD), on January 1, 2009 there are 184,500 (8%) more employees on the government payroll than on January 1, 2001. Over those same eight years, private sector employment is up only 33,600 (0.2%).This means that the public sector accounts for 85 percent of the overall growth in California over the last eight years.

Even before an estimated $6.4 billion in business tax increases from last year’s budget, California employers already paid taxes that were 20 percent more than the national average. The national population of millionaire households grew by 5.9% in 2007, Los Angeles County lost about 7000 of these households. Orange and San Diego Counties lost millionaire households as well.

Maricopa County in neighboring Arizona gained 23,000 new millionaire households in the same time period. Why? Arizona’s top marginal… Read More

This just in from Grover Norquist, Prsident of Americans for Tax Reform…

State Senator Dave Cox, who has been talked about as one of three potential AYE votes for the $14++ billion tax package, has apparently filed some amendments at the desk to the Big Five Big Tax plan. Contents of those amendments? UNKNOWN.

That said, Senators Dave Cogdill and Roy Ashburn are presumably ready to support the package. Coincidentally, the two of them are off of the floor right now.

So all eyes are now on the Sacramento Area Senator — Cox.

In the meantime, is there enough solidarity in the Assembly Republican Caucus not to JAM the process. We’ll see how this goes!

As Drudge would report… Developing…… Read More

3:30 PM Update: The Governor’s Office has responded to Zycher’s observations below, and that response can be found here.

As we rush speedily into a vote tonight on a "Big-5" produces budget plan that includes nearly $15 billion in assorted tax increases, one of the major "concessions" that is in the plan, to "sweeten it" for GOP support is the placing of a Spending Limit Initiative on the ballot (though we note that the Limit, if it passes, also extends the tax increases).

One of the policy experts on economics and state finances that I look to in this area is Dr. Benjamin Zycher of the Pacific Research Institute. Zycher was asked by the Howard Jarvis Taxpayers Association to review the final language.

… Read More

UPDATE: Well, it’s not news. But if you are looking for something to do, click here and look to the bottom of the right hand column. You’ll see Dave Cox mentioned…

Well it would appear that the State Legislature is going to meet into the wee hours.

Conventional wisdom seems to be that in the Assembly, Republicans Villines, Adams and Niello are set to go up on $14 billion++ in tax increases. In the Senate, Republicans Cogdill and Ashburn seem ready to go up on the taxes, but the third vote is being elusive. It belongs to State Senator Dave Cox who is the only other Senate Republican who has not make it clear he is opposing the plan.

Currently Cox is proposing an amendment concerning how Proposition 10 monies are reallocated (a pet issue of his). Apparently Cox has a whole boatload of amendments, and I suspect that one of them… Read More

Mike Genest, Governor Schwarzenegger’s Director of Finance has offered this response to Dr. Zycher’s concerns about the Spending Limit Initiative language in the current "Big 5" deal: Dr. Benjamin Zycher made five observations regarding the budget stabilization fund contained within the current budget agreement. In response to his “observations,” I offer five factual statements. Zycher observed: The degree to which the estimated revenue projection trend and the Budget Stabilization Fund would operate actually to limit general-fund spending is not clear.

Incorrect. The governor could not simply suspend the transfer of revenues into the new rainy-day fund. While Article XVI Section 20 (e) of the state constitution currently allows governors to suspend the… Read More