Proof that gossip is just that: yesterday I heard the opposite was true, today the financial press has it that Ebay star and ubiquitous McCain spokeswoman Meg Whitman is in the race for California Governor.

The Wall Street Journal blogged on it here, wrote on it here in today’s paper; and the Financial Times has it here.

More later.… Read More

When it comes to this year’s California state budget, there’s really only one question that matters: what’s going to be the price for a tax increase?

Let’s pretend that we can fast-forward past the next few weeks — or several months — of budget foreplay. Let’s assume that the Democratic scheme to pass a tax increase by majority vote doesn’t work, which means that some Republican legislative support will be necessary. Let’s look into the future toward that day when the California state legislature passes a budget by a two-thirds margin for Governor Schwarzenegger to sign.

Assembly Republican Leader Mike Villines has hinted that a package of tax and regulatory incentives that could improve the state’s business climate could be part of a tradeoff for some revenue increases. Because he was careful not to promise such an exchange, Villines was roasted by the state’s mainstream media for intransigence. But while he was not willing to negotiate against himself by offering up absolute assurances of Republican support before any serious discussions had occurred, he was effectively sending a message to… Read More

As many FR readers know one of my hats is as Chair of the CRP Initiatives Committee. I got a call yesterday, after I explained the rumors floating about a referendum should the Democrats and Governor agree on an extra-constitutional majority vote that raises taxes by calling them fees.

I was officially asked by State Senator George Runner to add this item to the CRP Initiatives Committee agenda at the Feb. CRP Convention should such a fee bill be passed. Runner has been working closely with taxpayer groups including the California arm of Americans For Prosperity to lay the groundwork should a referendum be needed.

There is also a Facebook page about stopping the car tax increase part of the proposed deal.

This clearly is a line in the sand. Failure would mean no business, no service and literally no ones pocketbook will be safe. We would live in fear wondering if we were next to be taxed, I mean feeed to death.

For those who emailed me, my kids… Read More

Politics is not like business. Making a deal in business makes sense if everybody makes money on it. Most of the negotiation in business is an attempt to maximize the benefit of a business deal to those trying to negotiate the deal, but in the end, if everyone makes money, the object is to make the deal. A business deal is a win/win deal (or at least perceived to be) or there is no deal

That is not so in government and politics. Political deals are by definition win/lose, or they would be business deals. You don’t have to force someone to do something that will make them money. Force is necessary only when one party or the other perceives that a deal is a loser. Politics involves winners and losers by definition.

That is why this coming year’s budget fight is a critical fight. The winners and losers are easy to define. If taxes are increased the winner is the government, i.e., the government unions and the permanent bureaucracy (the leaders of which actually drafted the budget). The losers are the taxpayers. It is just that simple.

Democrats get it. They want the government unions and the permanent bureaucracy to win.… Read More

[My thanks to Jon for the invitation to blog at the Flashreport. The best thing about the blog format is the chance to have back-and-forth exchanges, so comments on my posts — and emails to me — are encouraged!]

The scare tactics being used to stampede everyone into higher taxes are amazing. By estimating expenditures without reductions and by extrapolating current revenues and then multiplying that by several years, it is possible to declare a budget deficit that is bigger than the budget. The scaremongers are not quite there yet, but they are close. Let’s define the problem.

Revenues were $101 billion dollars a year ago. Despite declines in the economy, state leaders stuck to this number even up to the September enactment of the 2008-09 budget. Now these same people are all shocked and amazed to announce that the revenue for this year will only be $91 billion. Governments are not very good to adjusting income downward (actually, no one likes doing this), but by my math that is roughly a 10% drop in revenues from the prior year. Since there are lots of ways to squeeze 10% out of government spending the simple solution would be to… Read More

TheAssociated Pressis reporting that Californian Leon Panetta has been tapped by President-elect Obama to serve as the new CIA Director. This is the “change we can believe in”? The Obama Administration is starting to look like a game of Clintonian musical chairs—all the same players just different roles. I’m not too familiar with Leon Panetta’s intelligence experience, but a quick Google search doesn’t reveal much expertise in this field. With the situation in Israel unraveling, growing tension in the India/Pakistan region, an increasingly hostile Russia, and countless other international problems, the CIA position will continue to be a crucial department in dealing with terrorism. Let’s hope the Obama Administration has vetted Panetta’s qualifications better than some of his Cabinet selections.

h/t to the Sac… Read More

In our time-honored tradition, when I fly up to Sacramento, I like to share with readers some of the politicos on my flight (there's always someone)…

Today's featured co-passengers include State Senators Mimi Walters and Lou Correa, and Assemblywoman Diane Harkey. Also flying up is Arnold's Appointments Secretary John Cruz, and longtime FR friend Gina Zari, who is Senator Walters' Chief of Staff.

That's all for now… Wheels up!… Read More

Today we are leading off our main page with some exclusive content from Republican legislative leaders Senator Dave Cogdill and Assemblyman Mike Villines, as well as with a hard-hitting piece from Jon Coupal with the Howard Jarvis Taxpayers Association. Tomorrow, we’ll be bringing you some great commentary from some of our own team of correspondents including Dan Schnur, Ray Haynes, and yours truly.

I am pleased to officially welcome as contributors to the FR weblog Board of Equalization Member Bill Leonard and freshman GOP Assemblyman Nathan Fletcher. Look for some great commentary from these two, along with the rest of our stable of trusty center-right to right-right bloggers. We’ll be unveiling some additional new members of the blog team soon!

I’m actually headed off to the airport to make the trek up to Sacramento for a few days, renewing and establishing those contacts that allow us to bring you a lot of great breaking stories and original content on the page.

Before I sign off, though, I did want to take a moment to… Read More