Will Brown Alter Tax Proposal Because of New Revenue?
Day one of the “State of Emergency” protests by the teachers’ union and others has come and gone and the earth didn’t move. Protests were moderate by capitol standards. The arrests amounted to a sideshow.
Where there was movement was a shift in the policy debate because of the unexpected $2.5 billion that now sits in the state treasury. Republicans in the legislature are proposing to use that revenue to offset proposed education cuts. I expect every teacher who visits a Republican legislator during the protest week will hear that refrain.
What is the teacher’s response? No thank you? Hard to imagine.
The real question about this revenue surge is does it continue? Tax experts I talked to yesterday think it very well could. Remember the deficit that the governor is trying to close is for this year and next year. If the revenues continue to uptick next year then the deficit shrinks further and the governor’s current proposal of $10 billion in yearly new (or, in the governor’s language: extended) taxes will be seen as overkill.
Can we make growth a priority?
California’s budget, like the economy as a whole, may
be slowly slogging out of the Great Recession. Tax collectors have logged
better than anticipated receipts. The Legislative Analyst reports revenues for the
current fiscal year to be about $2.5 billion better than expected.
Of course, only in Sacramento would more revenues
(without tax increases) be a mixed blessing. The Brown Administration is downplaying the revenue
bump, placing it in the context of overall pressures on the budget, while
Republicans are barely restraining themselves from singing "Happy
Days are Here Again." These reactions are proxies for the parties’ positioning
on the Governor’s proposal to temporarily extend the 2009 tax increases.
A $2.5 billion, or even a $5 billion improvement in
tax revenues is still a long way from closing the remaining $15 billion
deficit. Yet the least painful approach and most enduring solutions are still
conspicuously absent from the public policy agenda – improving the state’s
economic performance. After all, the $2.5 billion in higher revenues came about
because of economic growth. Imagine what would happen if growth could be
improved and quickened.
Are Harris and Newsom Really the Democratic Future?
Who will emerge as California’s most important Democratic
politicians over the next generation? I don’t know. But I’d be willing to bet
good money that Gavin Newsom and Kamala Harris are not the answers to that
question.
A Los
Angeles Times story this weekend suggested the opposite: that Newsom and
Harris are leading a new generation of California politicians who will take
over from the trio of septuagenarians (people in their 70s) – Jerry Brown, Dianne Feinstein and Barbara
Boxer – who preside over the state’s hardest political offices.
It isn’t hard to divine why such a
story was written. Each was just elected to statewide office. Both Newsom and
Harris are attractive and charismatic. Each is great at grabbing attention.
Both can lay claim to some policy innovations during their tenure as San
Francisco elected officials.
Prop. 13 Still Left’s Bogeyman
Cross-posted at CalWatchdog.
California has become such a basket case that outsiders are starting to parachute in and report on the tales of woe from our deficit-racked, economically stagnant and politically dysfunctional state. It makes for good reading for a broader audience, and the reporters can enjoy themselves at the beach or at the mountains while they wag their finger at us foolish Californians.
Unfortunately, these critiques usually end up regurgitating conventional liberal wisdom, which certainly was the case in a ballyhooed recent story in the Economist.
The British publication’s cover story on California, “Where it all went wrong,” pins the state’s woes on direct democracy and on one initiative in particular – 1978?s tax-limiting Proposition 13. While the lengthy feature included incisive details and offered a handful of interesting ideas, it was one of the most intellectually dishonest investigations I’ve read in a while.
How does one look at California and its woes without mentioning the power of the state’s public employee unions, which control the Legislature and have driven spending on their members’ pay and benefits to unsustainable levels? How do you not focus on Democratic dominance of virtually every level of government?
Think Twice About Suing Nursing Homes
Trial lawyers are always looking for targets. Whether it is ADA, wage and hour, Proposition 65 or class actions, they always seem to find an avenue for profit. One of those avenues has been nursing homes. The care of seniors is a critical function in our society and in these economic times it is becoming an even bigger issue. People are living longer and healthcare costs are constantly a challenge to American families.
A recent study found that high quality nursing homes get sued almost as often as low quality nursing homes, illustrating that litigation, or the threat of litigation, does not actually lead to improvements in patient care. Personal injury lawyers are constantly arguing that these lawsuits are necessary in order to deter bad patient care and promote better care. Well, this study suggests that this is not the case. The only thing these lawsuits are doing is adding to the cost of housing and caring for the elderly.
A recent class action in California saw a $671 million jury verdict against a nursing home (not including punitive damages) – even though the nursing home had never received a single complaint against it. Proof of harm was not necessary for the lawsuit. Thankfully, the verdict was later reduced to $62.8 million, but if the original verdict had stuck this company would have been forced to file for bankruptcy.