Governor pressing hard for major tax increases

| February 02, 2011

Gov. Jerry Brown’s State of the State speech Monday night was pretty much what anyone should have expected, as the new governor championed his “tough-choices” budget and pushed hard for its centerpiece of a public vote on controversial tax extensions. Since his inauguration, Brown has made it clear he opposes tax hikes, but with one key caveat: unless they come with a vote of the people.

Monday’s speech was a full-court press for a vote on tax extensions that are, realistically, major tax increases. His entire budget plan is built around getting the people to approve such a tax-extension choice, and he became even more direct Monday, as he compared this issue to what’s going on in the Middle East.

“When democratic ideals and calls for the right to vote are stirring the imagination of young people in Egypt and Tunisia and other parts of the world, we in California can’t say now is the time to block a vote of the people from this process,” Brown said.

He presented this as some fundamental choice that touches on the essence of our self-governing political system. In reality, Brown is trying to muscle the Legislature and voters to support transferring more of their wealth to a state government that has not managed its affairs or budgets with even a modicum of good sense and discipline.

He continues to offer voters a false choice: higher taxes or fewer services. But he steadfastly avoids real cost-saving reforms. He mentioned pension reform in passing, but there are no such reforms incorporated in his budget proposal. He does not mention contracting out and competition, which result in cost savings. He ignored an education study released this week by Pepperdine’s Davenport Institute and co-sponsored by the California Chamber of Commerce.

That study found that, despite the governor’s and legislators’ decrying of deep education cuts, “In reality, total expenditures [excluding capital expenditures] have increased every year from [fiscal year] 2003-04 through FY 2007-08, before leveling off in FY 2008-09.” So there have been no drastic cuts and the student population has declined, meaning that per pupil expenditures are up and the increases are well above the increases in per capital personal income for all Californians during the study period.

Unfortunately, the spending has decreased for in-classroom activities and even for the pay and benefits of teachers. Meanwhile, administrative pay and benefits and bureaucratic costs have soared. The current system grossly misspends resources. Davenport researcher Steve Frates told me that if Brown really had courage, he would take the report and find ways to reallocate existing funds.

Brown stood up for one of his few genuinely original proposals — the plan to eliminate the state’s redevelopment agencies, which divert funds “directly from local property taxes that would otherwise pay for schools and core city and county services such as police and fire protection and care for the most vulnerable people in our society.” Good for him for resisting the pressure from city officials, but the rest of the speech was a bust.

The Republican response from Assembly Minority Leader Connie Conway was generally praiseworthy as she stood against new taxes. Conway, however, lost credibility this week when three members of her caucus joined a union rally to oppose cuts to a waste-ridden in-home health services program as union members chanted “no more cuts” in the background.

The big question: What happens after voters reject Brown’s tax measures? That is when things will become really interesting.


Steven Greenhut is editor of www.calwatchdog.com; write to him at sgreenhut@calwatchdog.com.

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