The Tax Commission Thinks Big
The meeting had ended a half hour earlier, but members of the state’s Commission on the 21st Century Economy – the tax reform body put together by the governor and assembly speaker – were eagerly talking and joking in a UCLA hall late Tuesday afternoon.
“You have to admit,” said commissioner member Fred Keeley, the Santa Cruz County treasurer and former assemblyman, “that the package is a game-changer.”
It is, as the rest of the state will discover next month when the commission is scheduled to approve recommendations to the governor and legislature.
In the post-meeting conversation, the commission’s chair, Gerald Parsky, wondered aloud if the legislature was ready for what was coming. Parsky told members that he thought lawmakers were expecting the group to recommend some reductions in income tax and extension of the state sales tax to services. In fact, there was surprising consensus for more extensive changes.
Little Compromise by Budget Committee
At the end of Tuesday’s final session of the Budget Conference Committee, Democratic Assemblywoman Noreen Evans of Santa Rosa thanked everyone but the cooks in the Capitol cafeteria for the fine job they’d done over the nearly four weeks of hearings on ways to close the $24.3 billion hole in next year’s state budget.
The six Democrats and four Republicans on the committee worked well together, she said, even through a “lively and comprehensive debate” on budget issues.
And what did all this bonhomie accomplish? Well, by the time the committee adjourned just after 7 p.m. last night, we had learned that one, the Legislature’s Republicans aren’t going to vote for taxes to close the budget gap and two, that Democrats are going to propose them anyway.
Governor Schwarzenegger and the Legislature
The Democrats solution to this new budget crisis? You got it! The same old thing. More taxes. Taxes on oil. Taxes on the Internet. Taxes on business. But Governor Schwarzenegger and the Legislature’s Republicans are demonstrating that they "get" the political mandate handed to Sacramento’s politicians by the people of California last May 19, in turning down almost all the Props — Balance the budget by cutting costs, and not raising taxes.
As a result, the Governor in particular, has adopted several cost-cutting ideas that suck the breath out of this Reagan-Republican and which should have conservatives across the state screaming his praises at the top of their lungs. One of those ideas, to just let state government grind to a halt when it runs out of money on July 1, might be just the medicine our state’s "tax-and-spend" politicians need to get cracking on solving the real "systemic" problem in state government – uncontrolled spending.
Legislature Listen Up: CA Gets Jobs and Tax Revenue from Successful Business
A Milken Institute study focused on the Chevron Corporation shows the effect on both job creation and tax revenue when a business runs successfully. Milken economists measured the ripple effect of doing business using the Chevron Corporation as an example. The study showed jobs were created not only by the company, but also jobs that came about to service both the company and its employees. With the legislature looking at a tax on oil, they should consider the possibilities of a reverse ripple effect: tax increases resulting in the reduction of jobs at Chevron and those that service the company.
Click Here to read my full commentary on the Milken Institute report that appears in the Sacramento Bee today.