How Public Policy Can Help Restore State’s Fiscal Health
With the California economy contracting and the state budget deficit increasing, the Governor has appropriately called for swift and decisive action. Our policy leaders must carefully examine which program reductions and which revenue-raising proposals hurt our economic recovery, and what new measures will stimulate productivity, employment and the creation of wealth for all Californians.
The California Chamber of Commerce has recently commented on some of the proposed tax increases, but our state’s fiscal health will never improve without a strong economy.
While the recession is global in reach, state public policy can make material improvements for California and, importantly, have an impact on how swiftly and strongly we will recover from this slowdown.
Car Tax Should be No More than 1%
Talk in Sacramento is that a deal on the budget deficit has advanced along these lines: Return the vehicle license fee (the car tax) to the former level of 2% from the current tax on a car’s value of two-thirds of 1% and put a population/inflation spending cap on the ballot.
Since the tax goes up before the voters have a chance to vote on the spending cap (probably in June; perhaps March) there is a risk that taxes will be increased but spending will not be capped. Spending interests will surely try to defeat a spending cap measure.
To off set this problem, any tax increase proposed as part of the budget solution should carry a sunset provision in case the spending cap fails at the polls. The sunset could occur at an agreed upon set time following the spending cap election.
Revehen Hits the Nail on the Head
Once in a while, I receive a message that hits me like a splash of cold water. And suddenly something complex becomes much clearer. For me, that message came via an email from an old family friend, the Rev. Verne Henderson. The complex thing was the country’s economic crisis.
Revehen, as he’s long been known, has spent a lot of time thinking about ethics, as a pastor, professor, and as a management consultant. He lives back in Boston these days. He’s among the wisest and most thoughtful people I know.
Waxman In; Dingell Out
In the exciting game of Musical Chairs starting in Washington with the changing of the guard from the outgoing to the soon incoming administration, there was a major development. Rep. Waxman is in at the helm of the hugely powerful House Committee on Energy and Commerce, and, after nearly 28-years, Rep. Dingell, buddy pal of the Big Three US Automakers, is out.