Today’s LA Times story by my longtime colleague Evan Halper makes one thing painfully clear. California’s Republican legislative leaders, for all their championing of direct democracy and the rule of the people when it comes to subjects such as Prop 13 (property taxes) and Prop 22 (same-sex marriage ban), are prepared to violate all sorts of voter-approved initiatives to get a budget deal and avoid a tax increase.
Halper got his hands on a memo that details what Republicans are talking about. As Halper recounts the memo’s contents, the Republican proposals involve "diverting money specifically set aside by voters for local governments, road and other transportation projects, mental health programs and early childhood education." To give a little history, voters set aside money for transportation via ballot initiative with Prop 42 (2002), for local government with Prop 1A (2004), mental health programs with Prop 63 (2004), and early childhood with Prop 10 (1998).
For Republicans to want to raid such funds is hypocrisy. To borrow against such funds in the name of opposing tax increases is dishonest. The act of raiding such funds creates a debt for the state that must be paid back. The very act of raiding the funds is thus a tax increase in disguise.
While much of Halper’s story is about the sales tax, the dispute between Republican Assembly leader Mike Villines and Gov. Schwarzenegger is not merely a fight over taxes, no matter how much conservatives frame it as such. It’s also about the merits of raiding such funds and violating the will of voters. Schwarzenegger is saying that you can hold the line on all tax cuts or protect the will of the voters — but you can’t do both. And he thinks there’s a deal in which he trades a temporary sales tax hike for a rainy day fund and some sort of spending limit.
If he’s right, Republicans should leap at the deal — and focus their attention on making sure that the spending limit is real. Republicans also should bargain for a seat at the table in the tax reform effort being launched by Assembly Speaker Karen Bass. And when they get such a seat, they need to participate openly, with the knowledge that some taxes may go up and some may go down as a result.
Yes, that may be too much to hope for. But Republicans could bring a business perspective to tax reform, and focus the reform effort not only on producing a broader, more stable tax base but a tax approach that improves the growth picture in California.