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Davis

Davis, California

Sunday, October 17, 2021

Column: Rx for CA

California has some of the highest taxes in the nation, but a major part of Gov. Jerry Brown’s solution is to expend great effort this year to make sure they stay that way.

And to raise them even higher.

The governor is pushing Republicans in the Legislature to approve a June election that will allegedly generate $14 billion in revenue from you and me, the California taxpayer. Another $12.5 billion in cuts would close the $26.5 billion budget deficit.

Senate and Assembly Democrats are apparently torn over just how to approach the possibility of the tax increases and extensions being turned down by the voters. State Senate President Pro Tem Darrell Steinberg (D-Sacramento) has publicly considered the idea of passing an all-cuts, no-taxes budget, in an attempt to show voters just how “bad” no new taxes would be, and then add funding later after the June vote.

Assembly Speaker John Pérez (D-Los Angeles) has taken a different approach and simply refuses to consider the possibility that the new taxes will not be approved. “Plan B is getting Plan A passed,” Perez told the San Francisco Chronicle. When it was then pointed out to him that the voters solidly defeated the same tax proposals two years ago, he more or less put his hands over his ears and shouted, “La-la-la-la-la, I can’t hear you!”

Nor will Brown get specific about what to do if the voters don’t cough up the dough. We all remember Brown’s moderate-sounding campaign mantra, “no tax increases without voter approval.” It turns out that meant “I’ll demand tax increases and won’t provide any alternative.”

Some Republicans have offered a way to compromise. They’ll get behind the tax extensions and increases on the condition that serious pension reform or a spending cap is also on the ballot. Such efforts might get at the heart of the budget problem by cutting spending to be a lot closer than $14 billion away from annual state income. In a press conference Wednesday Brown answered the Republican suggestion.

“You’re adding to the burden and complexity, and you’re picking up more opposition even though you add certain other areas of support,” he said. A moment later he added, “I don’t want to get this thing so weighted down that it falls of its own weight.”

Let me get this straight, governor. You’re saying California’s situation is too complicated for compromise? And it just so happens that the only “complicated” issue we can tackle right now is exactly what you happen to want? Give me what I want, Brown is saying to the Republicans, and maybe I’ll do something for you later.

Ha.

For someone who has been in politics for decades and campaigned for months on knowing how to fix Sacramento, Brown’s raising taxes and weak spending cuts strategy shows a profound lack of attention to how politics really works.

It also shows a lack of simple math. Extending temporary tax increases doesn’t actually fix the problem. It only buys time – at great cost. For a lasting solution, the governor would have to announce that the tax hikes are permanent. But even then that will only chase more and more people out of the state while making it harder and harder for businesses to thrive.

Permanent tax increases aren’t the solution. Temporary tax increases aren’t the solution. Substantial spending cuts and pension reform are the solution.

“But spending cuts will hurt people who need the money!” the Democrats cry, and in some instances they are correct, such as with education. But this is exactly what happens when decades of politicians make promises they can’t keep. A state can’t borrow forever. A state can’t raise taxes forever.

I don’t despise Jerry Brown at all. He recently showed up at a Republican gathering in Sacramento, without a notable retinue, and without any fanfare or insistence on the spotlight. I appreciate a politician who doesn’t require attention at all times from all people. It’s a rare occurrence.

But Brown’s prescription for California falls well short of looking like a cure for what ails us. And our state can’t afford to be sick like this any longer.

As it stands now, the Democrats in charge of the legislature and the governor’s mansion are still refusing to accept the reality of the numbers. My first target would be the union bosses who have had the run of Sacramento for many years. Because even if some people refuse to accept it, Plan B might actually be the end of California’s budget nightmare.

If you’ve got your own Plan C, send it along to ROB OLSON at rwolson@ucdavis.edu.

2 COMMENTS

  1. While your article concerns a serious issue in California (i.e. the fate of state-sponsored programs in the face of a $26.5M shortfall), your presentation is quite misleading, intended to convince audiences with the illusion of giving facts.

    You cite, for example, “simple math” as a primer for solving the budget crisis, and the need for prison reform. Whether or not I agree with your diagnosis (and supposedly easy solution), you fail to present any statistic on the effect of prison reform on the state budget.

    Rather, your point in the article seems not on serious reform (or you would have argued a constructive solution) than on partisan attacks and political rhetoric. You rely on presenting facts followed by skewed or added political interpretations followed by chants like “proposal A is not the solution. proposal B is not the solution. proposal C IS the solution.” If it is the solution, why haven’t you presented any concrete numbers?

    It seems that your column relies less on a dedication to facts and studies committed by panels and experts (gee, if you are going to write about it, you could at least read what the EXPERTS say) and more on your inherent political views–namely that all proposals by democrats are always bad, and that all proposals by republicans are always good. This is evident in your so-called defense of your feelings towards the Governor (as if you know him personally).

    Columns like this, I believe (yes, here I am inserting my opinion for the first time), should be based on the FACTS and NUMBERS by experts. What you are doing is adding noise to a very serious issue.

  2. You mention that education is something that must be cut. While I concur overwhelming with your argument that taxes cannot be increased, mainly to help attract others (especially businesses) to your state of California, you forget one major flaw in your propagation economics (a much more intellectual term for trickle-down): if you cut on education, which is already hurting greatly in your state, you make the state less and less attractive to potential residents. Now, granted some potential future employees of new businesses that emerge due to tax cuts will be single adults who do not care about education, but many will have (or want to have) families. These families will want high quality education for their children and this will not be available. Thus you encounter a dilemma that ‘businesses’ may be growing, but employment in the state cannot blossom due to great deficit in quality of living for families.

    It also goes without saying that an educated population is less violent (less crime, studies show) and contributes more to their community in terms of public services, charities, and the like. All of which would need private support in a world where spending cuts are the future. By cutting education and increasing the appeal for businesses, you would in essence create an even larger divide between the upper class and the lower class, with little to no middle class present. These situations would only possibly even out many decades down the line when the upper class invested high amounts of money in public education (which as history goes is not nearly as quick as needed). Instead their money would first go to private education. In theory it would be akin to building a society from the top-down. Some businesses can thrive on only white-collar, upper class workers, but many demand the presence of blue-collar workforce. The economic adjustments associated with these changes would be devastatingly long.

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