Tax revenue and government surpluses are up all over California, but that fact doesn’t satisfy advocates for more and more taxes. Tax raising activists could step on each other in the charge for more money.
It was reported last week that the state brought in another $1 billion in unexpected revenue. Already, California is sitting on its largest surplus in history, more than $20 billion.
And that is just the surplus in the state’s General Fund.
Other pockets of money for special purposes in the budget are also enjoying surpluses. One calculation estimates that these special fund balances have surpluses totaling $16-plus billion. Combined with the declared surplus of the General Fund, there is nearly $37 billion stashed away for a rainy day.
And there could be more.
Remember the recent controversy stirred up by State Auditor Elaine Howle who reported that the Cal State system had a reserve “hidden” from legislators of $1.5 billion.
Yes, there is a reason to have surpluses in government accounts to deal with economic downturns. But when do surpluses become “obscene” for government hoarding taxpayers’ money? The term “obscene surplus” was coined by California treasurer Jesse Unruh, a Democrat, in the late 1970’s that became a crucial fact in the run-up to the vote on Proposition 13.
On the local level, money is flowing as well. Property values are soaring all over the state. Not only San Francisco (up 6.6%) and Los Angeles (up 6.25%) have enjoyed increased values which come with increased tax revenues because of new construction and property sales, but most other counties have seen similar boosts, for example Fresno (up 5.84%) and Kings (up 6%).
With the state awash in tax revenue and sitting on surpluses why is there so much talk of moving forward with major tax increases? The split roll property tax increase is already on the ballot in 2020 to raise taxes on commercial property. Now the School Boards Association is considering putting forward a tax increase on the wealthy income taxpayers and corporations. In each case, the tax take annually is estimated up to $11 billion; that is until real world economics hit.
Then there is the proposal in the Bay Area to raise taxes $100 billion over 40 years to deal with the areas transportation woes. Sure, traffic is terrible and it is good to think about how to handle it, but if this measure appears with the other big tax proposals all aimed at the 2020 November ballot–and all these tax increases became a reality–the Bay Area probably won’t have a transportation problem because a lot of people would just leave.
More, more and still not satisfied.