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Campaign to Oppose Brown Tax Increase Launched

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

There will be a campaign opposing Gov. Jerry Brown’s $50-billion tax initiative and I will be part of it. Californians for Reforms and Jobs, Not Taxes, sponsored by the Howard Jarvis Taxpayers Association, the National Federation of Independent Business/California, and the Small Business Action Committee, kicks off its campaign today. The name of the committee sets the direction for how California can free itself from its on-going fiscal crisis.

California’s road to economic prosperity is through reforming spending programs and creating jobs – not raising taxes. Relying on tax increases covers up the state’s spending problems and discourages job creators from making that next hire or even keeping the employees they have.


California government desperately needs real pension reform and spending reform. Taxpayers cannot be relied upon to bail out the too generous offerings politicians have handed out to public employees in health and pension benefits while the taxpayers struggle to support their own health care and retirement funds.

Passing tax increases without first achieving serious reforms means we likely will be looking at more of the former and none of the latter.

 

During his first year in office, when the governor asked the legislature to place tax increases on the ballot, I wrote that the tax increases should go on the ballot along with pension reform and a spending cap. Giving in to taxes alone will remove the pressure to reform.

In fact, I supported a temporary tax when it was attached to spending reform on the 2009 special election ballot. The measure would have set up a rainy day fund/spending limit while continuing new taxes for two more years.

At the time, I wrote on this site in support of the temporary tax/spending limit measure that if no spending control were put in place, the new taxes already on the books for two years would “have bought us nothing in major reforms.”

The measure was defeated. There was no spending reform. The state had additional taxes for two years and continued its march toward insolvency.

Reforms first – then we’ll see if we need taxes.

Pension reform and spending limits are absolutely necessary for taxpayers to regain confidence in state government. I’m not talking about minor changes in which the legislators slap each other on the back and declare that they accomplished something. Now is the time for major, substantive changes.

The governor’s proposal comes with no reform and a “temporary” seven-year tax increase. When does the word “temporary” lose its meaning?

Instead of limits to the state spending habits, pension reforms, and changes to the way schools spend their money; the governor threatens voters with more school cuts if his tax measure fails.

How about looking at waste in government and the multiple bureaucracies, commissions and boards that could be cut back as referenced by the California Performance Review? How about cutting back the school overhead and getting more money into the classroom? One study found that statewide 50% of the school funds don’t get into the classroom.

In April, the Wall Street Journal pointed out a connection between out-of-control pensions and school funding. In an editorial titled, “California’s Pension Tax,” the paper argued Brown’s tax increase would not increase education funding but would go toward paying pension costs based on an actuarial report presented to the board of the teachers’ retirement system.

Now is the time to take a stand for the best way to fix California’s fiscal mess – reform the way the state spends money, reform the pension system, and create jobs. No to new taxes.

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