Cigarette Tax Should Go Up in Smoke
The most astonishing thing about the introduction this week of a new cigarette tax proposal offered by Los Angeles state Senator Alex Padilla was that Senate President Pro Tem Darrell Steinberg joined Padilla at his news conference to cheer him on.
Steinberg forced a few sleepless nights trying to squeeze a budget deal, which included controversial taxes, out of the Senate. He finally succeeded, but the package he worked so hard to achieve must be ratified by the voters in the May 19 Special Election. As anyone who listens to talk radio or reads a blog knows the tax part of the budget package has been generating heated opposition.
One of the charges against the budget deal is that the tax floodgates will open up, especially with projections of dropping revenue and new deficits on the horizon. While supporters of the budget package claim that the taxes passed are temporary to bridge a gap and that we are not seeing the birth of Taxifornia, there’s Steinberg giving ammunition to his political opponents by hailing a new tax proposal.
One Place Where Education Shouldn’t Be The Top Priority
Here’s a fact I learned during the state’s recent (and unfortunately somewhat ongoing budget crisis and cash crunch): When cash runs short, other states pay their bondholders – the people they’ve borrowed money from – back first. But not California.
Here bondholders are second in the priority of payments. Education is first.
Proud? Don’t be. It’d be better for public services, for the state – and perhaps even for education – if we reversed the two priorities.
Why? At a Zocalo Public Square event I moderated last month in Los Angeles, Peter Taylor, managing director in the public finance department at Barclays Capital, explained that California’s priority payments probably hurts our credit rating a little. So we pay a little bit more to borrow for the privilege of putting education first. The extra money we pay to borrow would be better spent on more public services, including education.
Stop the Rhetoric: Meetings Mean Business and Jobs
Because of the irresponsible actions of a few Troubled Asset Relief Program (TARP) recipient companies, there’s recently been a movement to prevent TARP recipients from hosting, sponsoring or paying for any conferences, holiday parties or entertainment events during the year in which they receive funds. Because I have built my career on promoting many aspects of sound public policy for the Golden State, I applaud efforts by the federal government to stop abuse of TARP funds. However, the ill-informed, anti-meetings rhetoric that is a popular bandwagon these days is seriously harming a legitimate and relevant industry. Now is not the time to stop holding meetings and events, as they can actually help spur more economic growth.