Our High Tax, Big Spending, Job-Killing Formula is Not Working
I hope legislators taking this week off are reading the newspapers. A number of articles serve as a barometer to California budget troubles. Simply stated, California taxes a lot, spends a lot, doesn’t seem to have much to show for it and jobs and taxpayers are leaving the state.
California gets much of its revenue from allowing business to flourish and to provide good jobs. But by making California an expensive place to do business we are driving the job makers away.
This Oakland Tribune article reports on the Auto Club closing three call centers in Northern and Southern California eliminating 900 jobs. Why? Because according to a spokeswoman from the California State Automobile Association: "It costs more to do business in California than in other states. Moving our call center operations to states outside of California gives us an opportunity to reduce our operating costs."
And with those jobs go the taxes that would have ended up in California government coffers.
Its not just 900 jobs that are leaving. Today’s Wall Street Journal editorial states that between 1996 and 2005, "1.3 million more Americans left than came to California. And the people who are leaving are disproportionately those with higher incomes…"
Prop. 13 and our failure to communicate
Michelle Steele’s response to my post yesterday asking why Speaker Bass has placed Prop. 13 off limits for discussion about fiscal reforms reinforces two common perceptions among folks in my age group:
- Republicans love gag orders
- Baby boomers, now that they’re the status quo, don’t like being challenged by younger generations
Yesterday, I asked why Prop. 13 is off limits for discussion in Speaker Bass’s task force. Ms Steel responded “because it works.”
I am fully aware and appreciative that Prop. 13 protects homeowners from escalating property taxes. My question is why my generation of home buyers has to pay so much more in property taxes for homes that are typically smaller than the homes we grew up in. That question was not addressed and since we’re not allowed to discuss Prop. 13, I suppose it will go left unanswered.
Unfortunate Run of the Month
The more IndyMac Bancorp withered in the last couple of weeks, the angrier I got at Sen. Charles Schumer.
The New York Democrat did what a responsible person should not. He worsened IndyMac’s fragile situation by encouraging savers to pull their money out. Financially speaking, he yelled “Fire!” in a crowded theater.
How so? He wrote a couple of weeks ago that he is “concerned that IndyMac’s financial deterioration poses significant risks to both taxpayers and borrowers and that the regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur.”
Now, I’m not going to argue that he wrote anything inaccurate. What’s more, I’m sure his concern was genuine.
Let The People Decide?
While the California State Legislature is locked in its annual budget battle and local governments wait for the impact of any proposed statewide cuts, a motivated group of citizens in Arizona are taking an innovative approach to address the state’s tax and spend philosophy.
An initiative, called Majority Rule – Let the People Decide Act, is pending certification by the Arizona Secretary of State. If placed on the ballot and approved by voters this November, the Majority Rule initiative would significantly raise the bar for approval of any tax measure.
The ballot language, which would amend Arizona’s state constitution, is short and sweet. It reads:
“To preserve and protect the right of the people to fiscal responsibility through true majority rule, an initiative measure that establishes, imposes or raises a tax, fee, or other revenue, or mandates a spending obligation, whether on a private person, labor organization, other private legal entity or this state, shall not become law unless the measure is approved by a majority of qualified electors then registered to vote in the state.”