The California Commission for the 21st Century Economy was created
by the Governor and Legislature in October of 2008. Its main
purpose, at least that which was represented to the public, was to
deal with the real issue of California’s revenue volatility. By now,
almost everyone knows that California is overly reliant on the
income tax to run the state and, because of its steep progressivity,
we are even more reliant on a handful of the “evil rich” to pay the
lion’s share of that tax. (Of course, notwithstanding this reliance,
our elected leadership still goes out of its way to drive these rich
folks out of California to places where profit and success aren’t
dirty words.)
Days after the Commission was created, this columnist wrote a piece
ringing the alarm bells. At the time, none of the commission members
had been selected but the real concern was that all twelve of the
Commission members were to be selected by individuals — the
Governor and Legislative leaders — who had just actively pushed for
massive tax increases. Without quality taxpayer representation, the
commission would have zero credibility.
Ultimately, the appointees to the commission reflected a diverse
cross section of political views. Sure, as a body, the Commission
probably balances further to the left than where the average
California taxpayer would like. But with fiscally responsible
members such as Curt Pringle, the Mayor of Anaheim, and some folks
from the Hoover Institution, at least those who pay the bills have a
margin of representation.
But the Commission — which has already blown through two deadlines
to complete its report — also has its share of uber-liberals.
Members like former legislator Fred Keeley who unabashedly has a
pro-tax agenda. In addition to pushing for a “carbon tax,” he also
is seeking an amendment to Prop 13 which would increase property
taxes on businesses.
The Commission will report its findings in September and the
Governor has already called for a special session of the Legislature
to consider and act on its findings. This is probably a mistake as
it would be better to see the report first. Calling a special
session sets up the expectation for action when, in all likelihood,
there will be no agreement on the commission’s recommendations.
Our primary concern, of course, is that calling a special session in
advance will put pressure on the Legislature to compromise. Well,
we’ve seen compromise in California when it comes to taxes and we
don’t like it. It was a “compromise” measure in February that socked
Californians with the largest tax increase ever passed by any
statehouse in the history of America. Over the last three decades,
California taxpayers have been “compromised” into shouldering one of
the highest overall tax burdens in the nation, if not the highest.
It is therefore critical that taxpayers remain vigilant to make sure
that, when the Commission’s report is released, taxpayers won’t be
asked to be bled a little more. That’s no compromise at all.