Taxes!! And Questions??
Governor Arnold Schwarzenegger declared California has a revenue problem and he plans to fix it by increasing taxes. But his tax increase proposals raise a number of questions.
The tax increases will come most notably in the form of a temporary sales tax of 1.5 percent for three years and adding sales taxes to certain services such as appliance and furniture repair, vehicle repair, veterinarian services, amusement parks and sporting events. In addition, an oil severance tax placed upon oil producers in the state; and increased taxes on alcohol at a nickel-a-drink.
Few should be surprised that the governor proposed a sales tax increase. After all, he pushed a sales tax proposal during the prolonged budget negotiations over the summer. However, he’s upped the ante this time—a 1.5-cent increase for three years. His office says that will bring in $3.5 billion for the 2008-2009 General Fund by the time it is implemented.
Conservative San Francisco and other Tales from the Election
Who said San Francisco doesn’t have a conservative bone in its body? Voters in SF voted down a measure to decriminalize prostitution, supported Junior Reserve Officers’ Training Corps in the schools, and rejected the idea to humiliate President George W. Bush by naming a sewage treatment plant after him. At this rate, we’ll see Republican Clubs popping up all over the city any day now.
Could it be that African-American voters, eager to put Barack Obama in the White House, were also the reason Proposition 8, the gay marriage constitutional amendment, passed? According to exit polling provided by the Sacramento Bee’s Capitol Alert, African-Americans made up 10% of the California electorate on Tuesday. While they were voting 95% to 5% to elect Barack Obama president, they also voted 70% to 30% in favor of Proposition 8. While Latino voters made up a larger portion of the electorate, 19% overall, Latinos nearly split on Prop 8, 51% Yes, 49% No.
Godspeed, Mr. President-elect; And, Whither California
Barack Obama was not my candidate for president. But, the voters of the United States have spoken and now he will be the president of all the people. The difficulty and reality of governing such a diverse and complex nation will take unique skills and a broad vision. A mix of tradition and progress must be in balance. Here’s wishing that our new president can meet the challenge, and in a traditional sendoff on this difficult journey, I wish you Godspeed, Mr. President-elect.
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Go Vote
With the help of the Internet, a few thoughts on voting as you head to the polls this Election Day——
“People often say that, in a democracy, decisions are made by a majority of the people. Of course, that is not true. Decisions are made by a majority of those who make themselves heard and who vote – a very different thing.”
Walter H. Judd, Congressman
“Hell, I never vote for anybody, I always vote against.”
W. C. Fields, American Comic and Actor
“Democrats are the only reason to vote for Republicans”
Will Rogers American entertainer
“Bad officials are elected by good citizens who do not vote.”
George Jean Nathan, American Drama Critic
Tax Commission Half a Loaf; Consider Spending, Too
Governor Arnold Schwarzenegger’s executive order creating a tax commission to modernize California’s revenue gathering system is missing an important ingredient. Stating the rational for a tax commission, the second sentence in the order reads: “Our tax system has not been restructured in over 80 years even though our economy has changed dramatically.”
While that is basically true what is missing is the other side of the equation–how we spend our revenue. Spending of public money has also dramatically changed in 80 years, and spending drives the need for revenue. Would it not be wise to examine spending as well to eliminate unnecessary programs or to remodel the way services are delivered so the that tax restructuring and spending programs can be fashioned at the same time to meet the actual needs of California?
This is not to say that the tax commission is a bad idea. There is value in looking at the tax structure and its relationship to the state’s economy. No doubt changes need to be made. But, if we are going to do a reconstruction job let’s do it right the first time. Patch the leaks in the roof as well as rebuild the foundation.
Fixing the Budget
The governor’s call for a special session of the legislature to deal with the budget problem served as a perfect backdrop for the budget panel at the Milken Institute’s annual state of the state conference yesterday in Beverly Hills.
The budget hole the governor and legislature have to deal with may get bigger if state Treasurer Bill Lockyer has his way. As reported on Fox and Hounds Daily yesterday, Lockyer said at the conference he would join Senator Dianne Feinstein to oppose the piece of the recently signed budget deal to securitize the lottery. That provision is supposed to provide $5-billion for the state coffers but must be approved by the voters in a special election that the governor will call next year. If it is defeated at the polls, the budget hole will be that much deeper.
The panel, moderated by Los Angeles Times columnist George Skelton, consisted of Republican Senate Leader Dave Cogdill, former White House Chief of Staff Leon Panetta, Senior Advisor to the Governor David Crane, newly appointed Legislative Analyst Mac Taylor, as well as Treasurer Lockyer.
Lockyer and Feinstein to oppose Lottery proposal in Budget Deal
At the Milken Institute’s State of the State conference today, California Treaurer Bill Lockyer said he would join with Senator Dianne Feinstein in opposing the governor’s proposal to use the lottery to help fix the budget hole. This propsal was part of the budget deal. If defeated in next year’s special election, another five billion dollar hole will appear in the budget.
Threatening Businesses Over Proposition 8
Threatening businesses that have made donations in the Proposition 8 campaign on gay marriage has become a weapon used by both sides in the debate. Opposing Proposition 8, Californians Against Hate, created specifically to draw attention to donors who contributed to the measure, organized boycott efforts against some business contributors as reported in the Wall Street Journal and elsewhere. ProtectMarriage.com, a leading group supporting Prop 8, announced it will publicize any business that donates against the measure unless that company also makes an equal donation to the Yes side. Rest assured, that publicity is intended to be negative.
Asking consumers to be political activists with their dollars is not a new phenomenon. Some have argued it is a good way for people to become active in politics. University of South Carolina history professor Lawrence Glickman argued in a 2005 Boston Globe piece that, “The fact that so many Americans are not only ardent consumers but avid consumer activists suggests that they see consumption not only as a private pleasure but as a public good.”
California: Fiscally Conservative, Socially Liberal — Or is it?
Conventional wisdom has pegged California as a fiscally conservative, socially liberal state. Whether that’s true or not will be measured by the results of a number of statewide ballot measures on November 4.
If Californians are truly fiscally conservative then the bond measures on the November ballot don’t stand a chance. How in heaven’s name can fiscally conservative voters support $16-billion in bonds when the California economy and the national economy are in meltdown mode?
These general obligation bonds have first call on the state treasury. In other words, the bond obligations must be met before a dime is spent on other state functions. So while it is technically true, as every bond ad screams out: THIS PROPOSITION ____ (fill in the blank with Props 1A, 3, or 10) WILL NOT INCREASE TAXES, bonds put pressure on the general fund because they reduce available tax revenue needed for day to day state responsibilities.
Leg Analyst Liz Hill on CA Budget Problems
California Forward, the non-profit group seeking to create a more responsive, representative and cost effective government held a session on the California budget in Sacramento Friday entitled, “Just How Bad Is It?”
One of the panelists was outgoing Legislative Analyst Elizabeth Hill who has been in the thick of the budget battles for over twenty years. Here is some of the thoughts and wisdom dispensed by Hill as she leaves her post: