Let ‘em Vote … on Everything
According to the USC Dornsife/Los Angeles Times poll released over the weekend, voters want to
vote on taxes. The poll says they also like the idea of spending limits (80%
support), and pension reform (70% in favor.) The poll did not ask respondents
if they wanted to vote on spending limits and pension reforms, but I’ll bet
they are just itching to do so. So here’s what we do: let them vote on all of
them.
Some argue that if the voters think they can solve the
current budget situation with tax increases and long-term structural budget
problems with spending limits and pension reform they may be a step ahead of
their elected representatives in Sacramento.
Of course, just because the poll cites voters’ positions
today, campaigns on all these issues could change their minds before the voters
actually mark their ballots.
Major League Baseball to take over State of California
Applying the same criteria in which Major League Baseball (MLB) stepped in to take over the operation of the Los Angeles Dodgers, MLB decided it needed to rescue the State of California from a similar crisis, baseball commissioner Bud Selig announced in a statement.
“Like the Dodgers, the state of California is on shaky financial grounds and there is a question of who is in charge.” Selig said. “Under these same circumstances that forced us to rescue the Dodgers, we decided to step in and help California.”
Selig explained that, like the Dodgers, the state has borrowed to meet its payroll and is potentially facing the need to use IOUs to pay its obligations as it has done in the past. “We could not stand by and watch that happen again,” he said.
Selig noted other similarities between the Dodger situation and the woes of the state.
Pointing to safety concerns faced by fans at Dodger Stadium and the need for beefed up security, Selig said he is similarly concerned with the safety of California residents after hearing Governor Jerry Brown say there could be layoffs of police officers if the budget is not resolved.
Brown-Negotiated Contracts with Public Safety Unions Signify Nothing Has Changed
If you needed more evidence that the Republican legislators
are right to push Governor Brown for long-term fiscal reforms in the current
budget face-off, look no further than the public sector contracts negotiated by
the governor. Giveaways in the contracts will only make budget matters worse as
time goes on.
At the end of last month, Daniel Weintraub reported
on this site that the Legislative Analyst’s Office review of contracts made
by the administration and public safety employees found that the promised ten-
percent cost savings were not there. Weintraub wrote: "The analyst believes the contract will
actually increase costs this year, save just 2.8 percent next year and then
start adding to the state’s payroll costs again the year after next."
Weintraub added that the contracts were "chock-full of concessions by
the state." Among those concessions were big costs to the state on changes to
employees’ time off and holiday pay. The contract allows for nearly 8 weeks off
even for new hires. The legislative analyst doubts employees will use all that
time off and will bank the time to be paid later when the employee leaves the
job.
Tax Chatter on Tax Day
There is a lot of conversation about taxes lately, perhaps
not strange since taxes are due to both the federal and state governments
today. But, the tax chatter is about potential new taxes that some or all citizens
will have to pay if certain politicians or interest groups have their way.
President Barack Obama last week called for a tax on the
wealthy, which he described as tax filers making over $250,000 a year. Governor
Jerry Brown continues his campaign to re-start the state income, sales, and car
taxes the legislature and Governor Schwarzenegger put in place in 2009. And, as
noted by Steve Harmon in yesterday’s Contra
Costa Times, labor unions are organizing a number of approaches to tax
increases in California, including ballot measures to tax such products as oil
and tobacco.
One tax that received attention in Harmon’s article is the
California Federation of Teachers’ proposal to tax the wealthy. The president’s
proposal on taxing upper end taxpayers could put a crimp in that approach here
in California. On the other hand, should congress stall the president’s plan, the
debate to tax the rich would move front and center here if the union qualifies
a ballot measure.
The Prospect of Two Californias and the Civil War
Imagine if there were two Californias. There have been 27
attempts to break up the state by one accounting, and in one instance the
people actually voted to create two states out of California. I bring this up
as the 150th anniversary of the attack on Fort Sumter occurred
yesterday because the Civil War is probably the reason there is only one
California today.
Of course, Governor Brown has
been saying of late that California and the country is as divided today as
it was during the Civil War, but that’s an issue for another column.
Remembering Kam Kuwata
Kam Kuwata was a genuinely nice man. The Democratic political consultant was a great strategist who had a passion for the political arts. He and I were on the opposite sides in campaigns a number of times including the high-speed rail bond and the San Fernando Valley secession effort, to name a couple. As with all the campaigns he worked on, he loved the politics and the strategy.
Kam spoke to my Pepperdine public policy class last fall and I had him on my list to invite back when I heard the terrible news of his sudden passing.
Over dinner after the class, he spoke of the exhausting grind of running then-U.S. Senator Barack Obama’s 2008 Democratic Convention in Denver. But he was up to the hard task, not surprising for a guy who would wake as early as three in the morning to begin catching up with overnight political stories.
Any Lessons from the Washington Deal for the CA Budget?
Preventing a
shutdown of the federal government, Republicans and Democrats in Congress and
the White House managed to reach agreement on the budget against seemingly
insurmountable odds. Are there any clues in the budget deal that could lead to
California’s politicians reaching agreement on a stalled budget plan?
The
particulars of a budget deal in Washington and Sacramento are different, of
course. California’s budget debate centers on taxes and the governor’s promise
to allow the people to vote on those taxes. Just as important is the question
of major budgetary reforms and the willingness of special interests, lead by
the public employee unions, to give the green light to friendly Democrats to allow
votes on those reforms.
The unions
have said no to putting reforms on the ballot. Republican legislators have felt
pressure from certain sections of their party not to even put tax measures
before the people.
Relating to the News
On this "casual" Friday, thought I’d just relate to some of
the items in the news.
TAX DEBATE
Calbuzz thinks I missed the point (to put it mildly) in critiquing
their support for certain tax measures — increasing income taxes for the rich
and property taxes on business. They say I didn’t deal with the concern of the
rich getting richer.
I offered a plan to give fairness to all in the tax system:
a well-constructed flat tax which picks a point on the income scale in which
the tax kicks in and gets rid of most write-offs and loopholes, which I noted
most often benefit the rich.
But, I think I hit the target on the tax proposals they
advocated, which will not solve California’s problems.
SB 653: The Threat of a Local Income Tax and More
Anyone interested in paying a county income tax on top of a
state income tax? I didn’t think so, but that’s what could happen if SB 653
(Steinberg) becomes law.
In anticipation of government restructuring that would move certain responsibilities to county government, this bill would authorize county supervisors to submit to voters a local personal income tax, a local corporate income tax, and a local sales and use tax.
Over fifty years ago, the legislature declared that income taxes would be the sole purview of the state while counties were authorized to levy other taxes such as taxes on hotel stays and business taxes. SB 653 would open the door to a local income tax to be placed on top of the state income tax, already one of the highest in the nation.
Buzzing Calbuzz on Taxes
The guys over at Calbuzz (Jerry Roberts and Phil Trounstine) went
on a rant in support of raising taxes yesterday claiming the way to save
California is to tax the rich and tax businesses. Tax the rich because higher
income taxes really don’t cause people to move, they say; tax corporations
because they are greedy. Furthermore, they cheered Jerry Brown taking his case
to the people on tax extensions, advising him to conduct a populist campaign
like he did when running for president in 1992.
Well, I’ll agree with them on one point: Brown should
campaign like he did in 1992 — and advocate for a flat tax like he did then. More
on that in a moment.
Taxing the rich will not be the savior of California’s
fiscal mess. People do change their behavior in response to tax increases,
especially the rich. Relying on a higher income tax will make the California’s
volatile tax system worse.