The gross misuse of taxpayer money draws needed attention

As Governor Newsom stares down the barrel of the pending recall, we wonder if he has given any thought to what he might have done to forestall or, at least, lessen the odds of being bounced.

Probably he has not. To all appearances, the governor seems genuinely to believe that the recall is a “Trump inspired” assault on what he calls “California values.” Judging from his record, the values he holds dear are high taxes, a high cost of living, a high poverty rate, a high unemployment rate, water shortages severe enough to require mandatory rationing, and regular power outages on hot or windy days.

The reality is that anger is running deep in California and not just among the roughly 6 million state residents who voted for Donald Trump. A recent poll found that 54% of Hispanic voters were in favor of the recall.

That must have shocked the governor and thrown his campaign team’s “get out the vote” strategy into chaos. “What if,” they must have been thinking, “we turn out the vote and it turns us out?”

Among the long list of taxpayer frustrations with this governor and, indeed, the state in general, are the huge lost opportunities of what could have been done during the year of the pandemic but was not. For example, the governor claimed credit for what was, in his calculation, a $70 billion budget surplus. (The Legislative Analyst’s Office checked his math and pointed out that the surplus was only $35 billion, but that’s still a big number). Regrettably, those tens of billions of dollars have been frittered away.

Newsom played Santa Claus, or maybe Chicago ward boss, by showering new $600 stimulus checks on much of the population. We’re generally in favor of returning excess tax funds to the taxpayers, but these weren’t tax refunds. They were one-time payouts to income-eligible people that, coincidentally, were timed to be mailed very close to the date that ballots in the recall election would be mailed. That bit of political stimulus soaked up $8 billion.

And speaking of soaked, that’s what taxpayers have been when it comes to water storage projects. In 2014, California voters approved Proposition 1, a $7.5 billion bond that preauthorized $2.7 billion for water storage projects that have still not been built. The California Water Commission determined funding eligibility for seven projects back in July 2018, and paperwork is ongoing. The first facility is scheduled to be operational in 2027.

Instead of making use of the budget surplus and his executive powers to expedite water storage projects, Gov. Newsom has announced that mandatory water restrictions will be coming soon.

Gov. Newsom also put $12 billion into extending his homelessness policy, which he has called a success, but which many Californians consider a disaster. A recent poll found that 60 percent of state voters disapprove of the governor’s handling of the homelessness issue.

As reported in this newspaper, a recent study reveals that the two biggest reasons why people are moving out-of-state are the tax burden and regulations. There is also the general perception that California doesn’t make efficient use of the tax money that is generated. That perception is accurate.

An analysis published by WalletHub in March reveals something that won’t surprise many Californians. Specifically, California ranks 49th out of 50 states in ROI (return on investment) for the taxes that citizens pay. It would be one thing if we were receiving value for our tax dollars but, put bluntly, we are not. The Golden State has the highest income tax rate in America as well as the highest state sales tax rate and gas tax. And yet with all this revenue, the state’s policies on homelessness, water infrastructure, transportation, and crime have been worthless at best and counterproductive at worst.

Many local governments, especially large cities, are equally negligent in providing good services at a fair price.

While they frequently plead poverty, claiming that the pandemic has severely reduced revenue, the California State Auditor shattered that contention in a report released just last week. The title is very revealing: “Fiscal Drought? Actually, Revenues are Pouring In.”

The report shows explosive growth in local government revenue from hotel taxes, business license taxes and sales taxes. And property taxes? Even with Prop. 13, the Auditor notes that “Property tax revenues also increased across the State. Economic forecasts indicate that California cities will receive over $2.3 billion in additional property taxes between fiscal years 2019–20 and 2021–22.”

The one bright spot is that the gross misuse of tax dollars and mismanagement are bringing much needed attention from media and government oversight agencies. Thanks to the recall election, voters may get there first.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.