The Paycheck Budget

Though hard to believe Jerry Brown and the Howard Jarvis Taxpayers Association actually have something in common. We agree that the budget just passed by the Legislature deserves to go directly in the trash. The governor has vetoed the gimmick-laden state budget hastily passed by a legislative majority so they can continue to receive their paychecks — the highest in all 50 states — and another $700 a week tax free in “meal money.”

Lawmakers’ checks were under threat due to Proposition 25 — which includes a “no budget no pay” provision — approved by voters last year. It was promoted as a permanent solution to the problem of late state budgets by repealing a 76-year-old law that required a two-thirds vote of each house of the Legislature to pass a budget. Sponsors of Prop. 25 Sacramento Democrats and other members of the tax-and-spend lobby saw it as an opportunity to dominate the budget process without having to consult with minority Republicans and as a chance to impose new levies without having to obey Proposition 13’s mandate of a two-thirds vote. To make it popular with voters the promoters of Proposition 25 included the pay penalty to be imposed if lawmakers failed to deliver a budget by the constitutional deadline.

Before Prop. 25 passed HJTA warned that it would be used as part of an effort to increase taxes with a simple majority vote and sure enough this budget just passed contained a quarter-cent sales tax hike. HJTA warned that Prop 25 would be used to threaten lawmakers with loss of programs in the districts they represent if they refused to support higher taxes and sure enough Senate boss Darrell Steinberg and Governor Brown have stated they would consider reducing the funding of services to the constituents of representatives opposing taxes.

And HJTA warned that lawmakers would be willing to pass almost anything just to keep their paychecks coming and sadly once again HJTA has been proven right. Legislators were so desperate to pass a budget — any budget — in order to keep their pay they showed themselves willing to use any means including illegal maneuvers and gimmicks in order to do so. Here are some examples:

The passage of a CALFire surcharge on home insurance policies — a tax on homeowners — is illegal if passed with only a simple majority vote;äóÂäóÂ the proposed stealing of $1 billion from California’s First Five funds — a program for children — is illegal without a ballot proposition decided by voters;äóÂ a $1.7 billion demand for money from Redevelopment Agencies (RDAs) under threat of extinction is likely illegal under Prop. 22 — approved by voters to protect local funds;äóÂäóÂ and the $1.2 billion the Legislature is relying upon from the sale of state office buildings has already been determined illegal.

Additionally the legislative majority attempted to impose an additional quarter-cent sales tax earmarked to repay a bond approved in 2004 which has been funded by something known as the “triple flip.” While “triple flip” sounds like an Olympic sport it is a convoluted rechanneling of revenue streams that would make a professional check kiter envious. It too is likely illegal and demonstrates the contortions to which politicians will go to get their hands on more taxpayer money.

At least half of the Legislature’s “budget solution” represented either unconstitutional maneuvers fund shifts or borrowing from special funds.äóÂäóÂ While Brown still seeks to increase the tax burden on California working families he got it right in his veto message when he said this budget “contains legally questionable maneuvers costly borrowing and unrealistic savings.”

Members of the Legislature should be on notice that that the public is on to their games. If they persist in approving illegal funding mechanisms to wring every last cent from taxpayers they don’t deserve to be paid at all.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.