Who remembers the WIN Button from the Ford
Administration? The WIN button campaign came to mind in reading the new effort
devised by the California State Employees Association Retirees to place
stickers on checks that read: "Paid by State Retiree."
WIN stood for Whip Inflation Now. In attempting
to bring inflation under control, President Gerald Ford and his advisors came
up with a campaign of both mandatory and voluntary measures to encourage the
public to engage in disciplined spending habits and personal savings. A public
relations campaign featuring WIN buttons was created to accompany the effort.
The buttons did little to change economic
habits. They quickly became the object of ridicule and some people wore the
button upside down saying the acronym "NIM" stood for: "No Immediate Miracles."
The state retirees want you to know the value
their spending power has on California’s economy. The effort is built on the back of a CalPERS
sponsored study recently released that claims public employee pension payments
have a $26 billion effect on statewide economic activity.
However, as Dan Pellissier, president of
California Pension Reform pointed out in a commentary
on this site last week,
Of course the economic impact would be exactly the same if General
Motors, Boeing or IBM sent the same $12 billion in payments out of a $230
billion pension fund, so there is no credit to be earned for merely sending out
government checks.Indeed, the downstream recipients do not care if the money their
customers use came from a public pension fund, a child’s lemonade stand or a
jar buried in the back yard. Not surprisingly, the CalPERS sponsored study
glosses over the fact that most of the money they distribute actually comes
from taxpayers, either as employer contributions to the program or as
additional payments imposed to cover staggering pension debts.
Like, the WIN campaign of old, the sticker
campaign may gather a few vocal supporters, but will have little impact on the
political debate and will be pretty much ignored by the general public.
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When California Treasurer Bill Lockyer addressed
the press in Sacramento last week, he noted that during Governor Ronald
Reagan’s last year in office the general fund took $6.02 per $100 of income, while Jerry Brown’s
recently passed budget is $5.20 per $100 income today.
I haven’t done an analysis but the state budget
has changed considerably since the Reagan years. How much spending is outside
of the general fund? How have the state funded programs changed in that time?
No one should be under the impression that
taxpayers in Reagan’s day were happy with the higher tax situation.
After Ronald Reagan signed the tax increase at
the beginning of his governorship, he was booed for three minutes when he threw
out the opening pitch at the 1968 Oakland A’s first game of the team’s first
season in California. Reagan commented on the booing: "I can certainly hear
that a helluva lot of you paid your taxes."
The treasurer also stated concern over a likely
proposal to raise high-end personal income taxes by initiative. Increasing the
top rate of California’s progressive income tax could have a negative impact on
job creators, the treasurer said.
Yet, quite often proponents of higher taxes like
to say that Ronald Reagan had a top income tax rate of 11% and that California
should return to that rate.
While Lockyer might oppose an income tax
increase that is getting much attention from pro-tax increase advocates, his
discussion of the tax take per $100 of income indicates he would
support a different way to get to the amount of taxes paid to reach the Reagan
number.
I suspect the alternate plans would receive the
same boos Reagan faced in 1968.