It’s a new year and for Californians, that invariably means new taxes. But there are many questions the tax-grabbing state bureaucrats should be forced to answer first.
Why is California the only state in the country that stubbornly refuses to reveal public spending records to a government watchdog, which has now prompted threats of legal action? If California education spending is at an all-time high, why are schools still short on cash? Why is there is no way to track educational spending to ensure it is going to the right place?
To be sure, many tax dollars disappear into the bottomless hole also known as bureaucratic waste. But clearly a large chunk of that money goes for public employee pension and healthcare perks. In a paper published by the Brookings Institution in May, University of Missouri economics professor Cory Koedel writes, “California’s pension debt is harming teachers and students now—and it’s going to get worse.” He explains that the California State Teachers Retirement System’s total unfunded liability is over $100 billion, “which is greater than the total amount of money spent to educate all of California’s public K-12 students for a year ($97.2 billion).”
Robert Fellner, executive director of Transparent California, reports that “Nearly 80,000 California retirees are receiving $100,000 or more in pension pay.” He adds, “Spending 52 percent more than the market average for public employees’ medical insurance is costing California taxpayers at least $3.3 billion annually.”
Additionally, San Diego taxpayer activist Richard Rider reminds us that California already has by far the nation’s highest state income tax rate. And the highest state sales tax rate. And the highest gas tax. What qualifies as “good news” is that our capital gains tax is second highest…in the industrialized world.
No matter. The Sacramento tax machine is oiled up and ready for more plunder. In fact, two of the grabs to be put directly to voter curiously and confusingly invoke “Prop. 13.” In November, pending signatures, we will be treated to the “split roll” initiative which would gut Prop. 13 protections for businesses. What split roll proponents fail to acknowledge is that when business costs increase, they are passed on to customers.
The “Schools and Communities First” initiative would provide more money for “education and local services. Since 1978, Prop. 13 has limited property taxes on all forms of property to 1 percent of assessed value, and limits increases in that value to no more than 2 percent a year, except when properties change hands.
The second Prop. 13, which will be on the ballot March 3rd, has absolutely nothing to do with the 1978 version. The 2020 Prop. 13, a “School and College Facilities Bond,” would authorize $15 billion in general obligation bonds for school and college facilities.
Clearly, the new Prop. 13, unlike its predecessor, is no friend to taxpayers. As Howard Jarvis Taxpayer Association president Jon Coupal notes, the $15 billion figure “reflects typical credit card math” because the money would be borrowed from Wall Street, and taxpayers would pay it back plus 80 percent in total interest costs. Hence, the stated $15 billion eventually becomes $27 billion.
Many Californians have had it. Business are leaving. In 2018, 1,800 companies left the state, with most bound for Texas. California is regularly No. 50 on “Best States to do Business” lists. Such longtime big taxpaying firms like Toyota, Charles Schwab and Carl’s Jr. have left for tax-friendlier states recently.
Golden State taxpayers may have finally reached a tipping point. Measure EE, a parcel tax that needed a two-thirds majority, failed to pass last June. Not only didn’t it get the required two-thirds, it couldn’t even garner a simple majority. Also, in tony Marin County, residents have formed an advocacy group. The mission of the Coalition of Sensible Taxpayers (CO$T) is to “pressure school districts to rethink their spending and funding.”
Over the next year, you are going to hear all kinds of sob stories about needing more money for “the children.” It’s way past time to ignore them and instead, vote your already depleted wallet. You can start by just saying No to Prop. 13 on March 3rd.
Larry Sand, a retired teacher, is president of the California Teachers Empowerment Network.
Originally published in the Orange County Register https://www.ocregister.com/2020/01/04/california-is-taxing-our-patience/