On Fixing the budget According to the Bee

I’ve been working on a piece about the governor’s office, but so far it is a real snoozer for anyone who doesn’t like numbers and spreadsheets. You know, that is a big part of the whole problem. To talk about this stuff intellegently requires that spreadsheets be used and cited. But when you spend too much time with them, you can hear the heads hitting the desks and the laptops clattering on the floor. Anyway, the Bee’s editorial yesterday talked about how they would fix the budget and I thought I would respond.



Californians are often accused of state budget hypocrisy – wanting it all but being unwilling to pay for it.

Californians are accused of all sorts of things. Most Californians are simply trying to hang on to their jobs and their homes in that order.

Yet according to a recent poll, Californians are more than willing to accept higher taxes to help bridge the state's $41 billion shortfall. The problem, in their view, is intransigence by state lawmakers and the state's two-thirds vote requirement to pass a budget.

What recent poll? Was it taken at the welfare line downtown? People who pay no taxes are often quite willing to raise mine.

According to the poll by the Public Policy Institute of California, 85 percent of those surveyed supported higher taxes on alcohol, 72 percent supported higher taxes on the wealthy, 60 supported higher corporation taxes, 58 percent supported an increase in the vehicle license fee, and 52 percent supported an increase in the sales tax.

Sin taxes always sound good when someone else is the sinner. Wait until they start taxing coffee, cheese and cellular telephones and take another poll. Corporations don’t really give a hoot about taxes because they just complain a lot while they pass them on to the consumer with higher prices. And are we really going to tax wealth, or just the wealthy’s income? Most would be surprised at how low the wealthy’s income can turn out to be. As to vehicle taxes, I think they should be based on the weight of the vehicle. Period.

The PPIC poll showed, for the first time, that a majority of those surveyed want the Legislature's two-thirds vote requirement to pass a budget lowered to 55 percent. There was also wide support for a cap on annual spending increases to prevent deficits in the future.

I agree with both of these ideas, although arbitrary caps on anything bother me. We need to bring some thought back into the process.

The survey should put to rest the idea that Californians won't accept personal sacrifices to restore some semblance of fiscal health to the state.

Where do these surveys come from anyway? Californians are hardworking and long suffering citizens of the state that has often driven the US economy while being called a bunch of goofballs who do nothing but sit in hot tubs and tickle each other with feathers. When I look around right now, I see Californians continue to make sacrifices all the time. This is nothing new.



Yet lawmakers still must decide which mix of taxes and spending reductions will cause the least harm to the economy while spreading the burdens equitably. On that score, they cannot be guided by polls alone.

Most of the windsocks we have occupying space at the Capitol won’t blow their nose without a poll or a number. Harm to the economy and spreading burdens equally? Ha ha! They just want to get re-elected!

This page has previously laid out some of its views on budget solutions. At the risk of repetition, here are some principles that should be the core of any deal.

• Cut up the credit card. Resist the temptation to issue "revenue anticipation notes" or other forms of borrowing. Such measures only will only increase the debt burden and extend the fiscal crisis to the future.

Agreed, but I don’t see bond measures mentioned, so I will. Bonds sound great to voters who own no property.

• Don't just solve the midyear budget problem. To the extent possible, close the entire $41 billion shortfall.

You mean by raising taxes, right? Why don’t you just say so? I might actually agree with you.

• Don't depend on a sales-tax hike. A better alternative: Temporarily increase personal income taxes and raise the vehicle license fee to 1 percent, in line with the property tax. Both the VLF and personal income taxes are federally deductible, unlike the sales tax.

There, was that so hard? Now we know what you are talking about. I’m not averse to raising taxes, but are you willing to cut some programs and executive and legislative office budgets?

• Broaden the state sales tax but reduce the rate to make it revenue-neutral in the first year. It is only fair that, in a service economy, service businesses and consumers of those services pay their fair share.

Fine, give it a try. But what will probably happen is people will make fewer purchases. And by the way, who says they were not paying their fair share before? You? Who else?

• Increase the state gas tax and index it to inflation. Use this money to pay off transportation debt and support transit programs, freeing up money in the general fund.

Sure, fine, do it. But only because it will encourage people to drive less and reduce our dependence on foreign oil. What do you plan to do when everyone takes the bus and quits smoking and drinking?

• Cut the costs of prisons, which have doubled to $10 billion annually in the last decade. The legislative analyst has proposed shifting 14,000 low-risk prisoners – drunken drivers, drug abusers, etc . – to local rehabilitation programs paid for by a hike in the VLF. Moving low-risk prisoners from high-cost prisons would save the state billions while reducing overcrowding.

Agreed. Low risk prisoners should be released and forced to work and pay taxes. Maybe we can shoot them if they fall back. I’ll admit that I admire yet another hit to the vehicle licensing fee. I still say weight only.

• Control costs in the In-Home Supportive Services program, which provides payments to relatives and other workers to care for the elderly and disabled as an alternative to nursing homes. Costs for the program have risen markedly since 2001 and now constitute $1.8 billion of the budget.

Agreed. Old people are expensive to care for and we are all getting older in increasing numbers. Keep in mind though, that “Control costs” in budget-speak means “make cuts.”

Lastly, as painful as it will be in a recession, the Legislature must make cuts to welfare and social service programs, even though some of California's most vulnerable – the poor, the elderly, the disabled – depend upon them.

Yes. Anger the poor, the elderly and the disabled. The poor have nothing and pay no taxes, so they will embrace every bond measure and tax increase that comes down the pike. The elderly are one of the most affluent groups in existence. They have great wealth and little income. They can always be counted upon to raise my taxes. I don’t know what the disabled will do, but if I know the bee, they have determined they will vote to raise taxes. The real irony of this is that by hammering these groups, they will actually be more inclined to vote for measures they think will help them when in fact all they will do is raise taxes to close the deficit while only donating a token amount to their causes, if indeed any money at all goes to them.

But in a report, the legislative analyst recently offered some good ideas for minimizing the pain. Lawmakers should use it as a road map for making some extremely tough choices.

Our legislators love pain so long as it is not theirs. Pass the damned budget and move on. God knows we’ll survive. We always have and we always will. Californians rock.