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

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

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

Over the last months of budget negotiations, there has not been evidence of a proposal forwarded by a state legislator of either party that reduces spending by the $40 billion necessary to balance the budget without a sizable tax increase. If that proposal exists, it has not benefited from sufficiently wide support from that legislator’s colleagues to become part of the budget debate.

Because of a lack of an alternative that balances the budget solely through spending cuts, it’s been apparent for some time that the final budget agreement will ultimately involve a considerable amount of additional taxes. That’s not a good thing, but it’s a thing. So at this point, Republicans have two options: either continue the stalemate indefinitely or propose that alternate budget. The lack of a state government holds great ideological appeal, but creates practical difficulties. So the question is: where is that alternative budget and the plan for building public and political support for it?

The budget before the Legislature is no cause for celebration. It’s unlikely that the Republican leaders who have been part of the negotiations –… Read More

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

Today the Republican Party here in California is at a crossroads.

We watched from here in the Golden State while the GOP’s brand name was severely damaged by a Republican President and Senate and House majorities earlier this decade, when with GOP control, our party “presided” over growth in the size and scope of the federal government. Credibility is now an issue for our party, because our rhetoric did not match our actions.

Today, on a holiday weekend, on Valentine’s Day no less, at night, the State Legislature will gather in the State Capitol to vote on a state budget deal that is really, really bad news for California taxpayers and their families – the center point of this place is $14.8 billion in new taxes (more like $70 billion in new taxes over five years if all of the taxpayer-pain envisioned in this plan comes to fruition). I won’t spend time in this column blasting away at the poor policy reasons to oppose this plan, Assemblyman Chuck DeVore, Jon Coupal with the Howard Jarvis Taxpayers Association and John Kabateck with the National… Read More

Today the Republican Party here in California is at a crossroads.

We watched from here in the Golden State while the GOP’s brand name was severely damaged by a Republican President and Senate and House majorities earlier this decade, when with GOP control, our party “presided” over growth in the size and scope of the federal government. Credibility is now an issue for our party, because our rhetoric did not match our actions.

Today, on a holiday weekend, on Valentine’s Day no less, at night, the State Legislature will gather in the State Capitol to vote on a state budget deal that is really, really bad news for California taxpayers and their families – the center point of this place is $14.8 billion in new taxes (more like $70 billion in new taxes over five years if all of the taxpayer-pain envisioned in this plan comes to fruition). I won’t spend time in this column blasting away at the poor policy reasons to oppose this plan, Assemblyman Chuck DeVore, Jon Coupal with the Howard Jarvis Taxpayers Association and John Kabateck with the National Federation of Independent… Read More

Friday at noon, San Bernardino County Assessor Bill Postmus officially resigned and vacated his elected office.

It is a significant milestone, if not likely the end of a once-promising political career.

Some of you may have been curious as to why I have been silent on the ongoing controversies involving Bill as well as his indicted former top assistant, Adam Aleman. This is only fair considering the fact that Bill and I worked together for many years before he moved on to the Assessor’s Office.

Frankly, I should let you know that I haven’t talked to my old friend for quite some time, for a variety of good reasons. One of these reasons was the fact that the San Bernardino County Board of Supervisors is the only board in the state with the authority to remove a county elected official. It involves a quasi-judicial process, which required me to maintain a significant degree of impartiality.

I have no idea where the ongoing investigations involving Mr. Postmus will now lead. It is, however, a shame that the good things Bill accomplished in office will be necessarily overshadowed for some time by his actual, alleged and perceived… Read More