One man’s “trigger” is the same man’s “deflator”
The spending "trigger," passed by the Legislature at Gov.
Brown’s insistence, hedged a hoped-for $4 billion in new revenues spurred by a
recovering economy with up to $2.5 billion in cuts if those revenues didn’t pan
out.
This mid-year correction was a prudent response to balancing a budget on
notional revenues, when Democrats couldn’t bear to make more cuts and
Republicans couldn’t countenance new tax revenues.
With the economy still in the doldrums, and the trigger more likely than
not to be pulled, legislative Democrats are beginning to feel gun shy. They’ve
introduced legislation to minimize community college fee
increases and to pressure Brown to reconsider making the broader cuts should
the new revenues not materialize. A spokesman for Treasurer Bill Lockyer castigated the move, saying, "The triggers were one of the
strongest features of the budget. It’s unfortunate there’s a possibility they
will be weakened."
Legislature should heed President’s example on overregulation
President Obama deserves credit for shutting down an ill-advised regulatory effort by
his Environmental Protection Agency, one that would have ratcheted down the
national ozone standard for new emissions. The EPA had estimated the tighter standard would
save 12,000 lives each year but could cost the economy as much as $90 billion
annually.
The President cited the
struggling national economy to justify withdrawing the proposed rule, and faced
withering criticism from environmental advocates. His action is a belated but
welcome recognition that government overregulation threatens economic recovery
and damages our national competitiveness.
Small but important step on regulatory reform
It’s no secret that the Legislature has been AWOL on pro-growth
and job-creating
legislation.
Some Senate Republicans proposed tying economic development legislation
to tax extensions for the state budget earlier this year. That effort died on
the vine, but the seeds were planted for limited reform of the state’s
regulatory system.
A tender shoot emerged this week with the announcement by Senate Pro Tem
Darrell Steinberg of legislation to add a beefed-up economic impact analysis
requirement for new state regulations.
Renew California – an economic recovery plan for immediate action
Lawmakers returned
to the State Capitol for the final month of this year’s Legislative session.
Having pushed aside state budget woes for a leisurely six months, legislators
have no excuse but to focus on economic recovery.
They can look no
further than a useful document released today by the California Chamber of
Commerce (my employer) enumerating an agenda of policies and activities that
can help the Golden State regain its economic competitiveness.
What he said: “Do no harm!”
"State government must adopt a "do no harm" approach
to statewide policy." Not my words – they were written by Lieutenant Governor
Gavin Newsom in his just-released "Economic
Growth and Competitiveness Agenda"
Shorter Gavin: "Yo, lawmakers, think before you
vote."
"Do no harm" must become the watchwords for state
policy as we struggle through the halting steps of the
economic recovery – or face up to the possibility of
a double dip recession, as some observers fear.
Trial lawyers defend taxpayers – no, really!
Here’s a case that could make a proper conservative’s
head explode.
Conservatives loathe trial lawyers who pursue class
action cases that shake down businesses and stifle innovation.
Conservatives also despise politicians and
bureaucrats who increase taxes without regard to fairness, impact or even
legality.
On Monday, matter and anti-matter met at the
California Supreme Court, when the justices – led by Ming Chin – ruled that taxpayers could aggregate into classes
to fight illegal taxes levied by local governments. The Court stated that where
state law does not spell out procedures for seeking individual refunds of an
illegal tax, then a class action remedy is appropriate. Such was the case with
the contested Los Angeles telephone tax.
June 2012 spending cap measure will stop budget gimmicks
Treasurer Bill Lockyer told reporters last week that a proposed state
spending cap on next June’s ballot is unusually restrictive and will force a
significant downsizing of government – and especially higher education.
The Treasurer is a keen observer of and among the
most experienced and knowledgeable players in state budget policy and politics.
But on this issue he’s wrong.
Mr. Lockyer was referring to ACA 4, a proposed constitutional amendment placed
on the June, 2012, ballot by the Legislature. The measure aims to accomplish
two goals: create and enforce a Rainy Day fund for the state’s budget, and
require that unforeseen revenue spikes be spent for one-time purposes and not
added to the general spending base.
Far from "spelling doom" for key programs, ACA 4 will
protect them from irresponsible short-term budget gimmicks.
Amazon’s referendum will test whether Prop 25 undermines the voters
The referendum filed yesterday by a representative for Amazon to
repeal the law applying sales taxes to certain online
purchases would have a small effect on the state budget, if successful.
But if the referendum appears on a ballot, it would
make a major statement about one of the most important untested aspects of last
year’s Proposition 25. This measure is best known as
permitting the state budget and appropriations to be approved by a simple
majority vote of the Legislature, and withholding pay and expenses from
legislators if they miss the June 15 deadline to pass a budget.
During last year’s campaign on Prop 25 I argued that the measure could also threaten the
very existence of the people’s referendum power; that is, the ability of voters
to reject at a statewide election a statute passed by the Legislature. Simply
stated, I suggested that the creation of a new category of budget-related
bills, which can take effect immediately but be passed by a majority vote of
the Legislature, might insulate virtually any bill from the threat of
referendum. Prior to Prop 25, the only measures insulated from the referendum
were those passed by a two-thirds vote of the Legislature – a high standard
requiring substantial legislative consensus.
Don’t look now, the Legislature is increasing your taxes
Just because state taxes weren’t extended by the
Legislature (or the voters) to close the state budget gap doesn’t mean the
Legislature is not planning to raise your taxes.
And when I write "Legislature," I’m including
Republicans.
Even as negotiations to temporarily extend sales,
income and vehicle taxes came a cropper, both the Assembly and Senate approved
legislation – by supermajority votes – moving tax increase proposals to the
opposite house.
These tax increases would not support trivial
programs like colleges and universities, trial courts or state parks. They go
to a core function of state government: subsidizing renewable energy and energy
efficiency programs and research.
Budget Judge
Controller John Chiang took a victory lap this week,
enjoying accolades from an unusual quarter – legislative Republicans and conservatives. But while Chiang has made
political hay by slamming shut the pay window, he has actually added to the
fiscal irresponsibility surrounding the budget.
If the Controller’s action is left unanswered, the
Legislature and Governor will effectively no longer have the final word on the
state’s budget. The Controller will be able to second-guess – and only after
the fact – whether a budget passed by the Legislature is a bona fide budget,
for purposes of deciding whether legislators will continue to be paid. The
criteria the Controller uses to determine "balance" is of his own devise. He
may change it from year-to-year as he pleases. He may even halt legislative pay
after the Governor signs and enacts a budget.
One can envision future Big Five negotiating sessions
becoming a Big Six, with appropriate consideration given to the Controller’s
priorities.