How Do We Respond to the Budget Crisis?

It has been said that when the California Legislature departs in September for the year taxpayers can finally loosen the hold on their wallets and use that hand to wipe their brows thanking their lucky stars they made it through another tax and spend romp in Sacramento. 2008 however may prove to be the year taxpayers grab onto their wallets with both hands and never let go.

The state at minimum faces a $16 billion deficit. The solutions being offered are coming from two schools of thought. The first says that taxes must be increased to cover any shortfall regardless of the impact on taxpayers or the economy. The second says that the difference between revenue and spending should be resolved by cuts in spending which has increased 36% over the past four years.

Of course a majority of California legislators agree with the former approach to the detriment of the taxpayers protections contained in Propositions 13 and Proposition 218 the Right to Vote on Taxes Act. These constitutional protections are now being threatened by legislators whose sole focus is to appease the spend-happy special interests that got them elected not the already heavily taxed constituents they were elected to serve. The result is a government with little fiscal accountability and discipline.

So it comes as no surprise that Sacramento has proposed at least six different proposals that would directly impact Propositions 13 and 218. If all were approved it could mean tens of billions of new taxes.

What follows is a tax hike wall of shame that demonstrates to what lengths legislators will go to take more of your hard-earned money:

1. ACA 10 by Assemblyman Mike Feuer: Would lower the threshold for local transportation infrastructure bonds from two-thirds to 55% much as Proposition 39 did for school facilities projects in 2000. Of course this bond debt is not subject to Proposition 13’s one percent cap and would place significant new burdens on property owners many of whom are already struggling to keep up with their mortgages. It should also be noted that HJTA has opposed five of Mr. Feuer’s bills this year giving him the dubious distinction of winning the 2008 "Taxpayer Despair" award among his legislative peers.

2. SCA 17 by State Senator Joe Simitian: Would lower the two-thirds vote threshold for school district parcel tax increases to 55%. The same logic applies to SCA 17 as ACA 10. Proving that if at first you don’t succeed tax tax again Mr. Simitian has now introduced this bill in consecutive legislative sessions.

3. SCA 21 by State Senator Christine Kehoe: Would lower the general obligation bond threshold for "essential services buildings" including for local emergency and public safety from two-thirds to 55%.

4. SCA 22: Would eliminate the two-thirds constitutional requirement to pass a budget and would also prohibit a referendum on "any bill scheduled to take effect immediately." SCA 22 willfully ignores voters who widely rejected Proposition 56 to lower the budget approval threshold to 55% in 2004.

5. SB 1430 & SCA 18 Senator Torlakson: SB 1430 creates a new vehicle to tax people an "education finance district" which consists of school districts joining together to approve new taxes. SB 1430 would provide the power for these districts to levy special taxes and SCA 18 would ensure that could be done with a majority vote in stark violation of Proposition 13 and the California Constitution.

6. AB 2914 Charles Calderon: Would impose an 8 percent tax on the viewing of adult entertainment. This bill puts tax-happy legislators in the awkward position of rooting for X-rated businesses in order to put more money in the General Fund coffers and would be similar to the clean air and health groups who are dependent on tobacco taxes having a vested interest in more smoking. Mr. Calderon has now introduced this bill in consecutive years.

7. SCA 13 Senator Torlakson: This bill would impose an additional tax on cigarettes for health-related purposes despite the fact that voters rejected a similar proposal Proposition 86 in the 2006 elections. We again stress that this budget will not be balanced by raising taxes.

8. AB 2897 Loni Hancock: Would impose new income tax rates of 10 & 11 percent on those making $136000 and $272000 respectively. According to the non-partisan Legislative Analyst’s Office over half of the personal income tax dollars collected come from those making over $200000 a year but they make up just three percent of the total returns. It seems counter-intuitive to propose policies that would encourage those already contributing the most to leave our state.

9. AB 2372 Joe Coto: Would place a one percent tax increase on those making over $1 million annually to fund higher education. Clearly this would again lead to a mass exodus of taxpayer dollars from California.

Nineteenth century orator Wendell Phillips once said "Eternal vigilance is the price of liberty." So too HJTA is always watching ready to advocate for a budget that will be balanced with spending cuts not taxes. The above list demonstrates how your Legislature responds to a fiscal crisis of its own making. It will take tremendous pressure from every citizen to compel lawmakers to see reason and pass a budget that respects the fact that California taxpayers are already among the most generous in the nation.

Jon Coupal is President of the Howard Jarvis Taxpayers Association — California’s largest taxpayer organization — which is dedicated to the protection of Proposition 13 and promoting taxpayers’ rights.