Brown Budget Proposal Sparks Tax-Cut Opportunity

John Seiler
Former Editorial Writer at the Orange County Register

For the first time in 30 years of writing on California budgets, I believe revenue projections are way too low in a governor’s January proposal. But that’s OK. Lower revenue expectations certainly mean there’s less chance of overspending, the common problem!

Gov. Jerry Brown’s budget, announced Jan. 10 at a press conference, projects a deficit of $1.6 billon unless parts of current spending are cut. Actually, as he noted at his press conference, the cuts he wants would come from reducing projected spending increases.

“The trajectory of growth is declining, but still growing,” he said. “We would not have balanced the budget without cuts. California has the most progressive tax system in the United States. But as a corollary, we have one of the most unreliable revenue systems in the country. To manage unreliability requires prudence, that we keep a very close eye on the balance in our budget.”

Afterward, I took part in an editorial writers’ conference call with Michael Cohen, Brown’s budget director. He explained the pessimism, “Five of last seven months reflect us being sort of expectations, including the key personal income tax months of June and September.”

Those were the dismal months when it seemed Hillary Clinton would be elected president (although I always predicted a Trump victory). She was going to massively increase taxes and regulations, tanking the economy even from the low growth of the Obama years.

Business were bracing for massive anti-business shocks. Especially in California, where increased costs from federal oppression would be met, in many cases, with moves to lower-cost states – or countries.

Then Trump won.

Since Nov. 8, businesses have been recalibrating for massive growth from large tax cuts and slashing regulations. The stock market has been zooming. As I wrote on Fox & Hounds, Trump will Make California Great Again.

When I brought this up with Cohen, he replied, “That’s why we have a May Revision every year, to look at the tax receipts. It’s certainly possible revenues could go up.”

So, what to do with the extra revenue that’s pouring in? Tax cuts!

This is one of those prime opportunities I keep urging Republicans to seize. It’s your time, elephants. When Brown’s $1.6 billion “deficit” turns into an $8 billion surplus, how about pushing for a suspension of the Proposition 30 tax increases (still hanging over us from the 2012 vote)?

Of if that’s helping “the millionaires” – which in Californiaspeak means anyone making more than $250,000 a year – how about a 1-cent cut in the sales tax?

Of course, Democrats won’t go for any of that. Which is why you then can beat the drums for a 2018 tax-ballot initiative of the type I outline here and here.

Republicans, it’s time to strap yourselves to the Trump tax-cut rocket and ride to the moon. Gov. Moonbeam is giving you the chance.

As Ronald Reagan urged: If not us, who? If not now, when?

29-year Orange County Register editorial writer now writes freelance. Email: [email protected]

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