For the Left, the cost of spending is never too great. As Harold
Meyerson’s recent Washington Post
column ”How the Golden State Got Tarnished”
shows, the price often includes factual accuracy. Only by
overlooking the fiscal and political facts can he advance his
argument that California is hostage to a minority’s opposition to
the tax increases necessary to “move [it] toward a more
sustainable economic future.”
Meyerson attributes California’s current deficit problems to the
1978 passage of the tax limitation amendment Proposition 13. He
argues this initiative allows a willful minority of conservative
ideologues to prevent the tax increases the fiscal situation, and
the majority of Californians, demand.
Asserting “we must understand the state’s road to insolvency,”
Meyerson incredibly fails to make any mention of the state’s
spending! Since deficits are composed of two parts — revenues
and outlays — it is logical to expect both to be examined. That
would be the route if the truth, rather than a conclusion, were
being sought. Failing to even once reference spending is not akin
to telling half the story; in California’s case it is not telling
any of it.
Looking at state revenues and expenditures in the years following
1978, when Proposition 13 passed overwhelmingly with 70% of
Californians voting and 65% supporting it, we see a very
different story from the one Meyerson tells.
In its 1978/79 budget, California spent $16.1 billion from its
General Fund. In its 2007/8 budget, the year before the current
deficit debacle, California spent $103 billion from the General
Fund. That is a 640% increase over the period. And even this view
of spending is conservative because the General Fund excludes
several other sources of the state’s spending, such as federal
funds, special funds, and bond funds.
Looking at the same period, California revenue increased 680% —
rising from $15.1 billion to $102.6 billion. Meyerson’s argument
that Proposition 13 “reduced revenue” is patently false. Not only
has revenue increased — it has increased in a greater percentage
than spending — but still cannot keep pace.
Of course, maybe California’s performance is not out-of-line,
even if out-of-step with its own fiscal needs. It is worthwhile
to compare its revenue and expenditure growth with some external
yardsticks. Let’s take two: federal performance and GDP growth.
Over the comparable period, 1979 through 2008, federal outlays
increased from $504 billion to $2,978 billion, while federal
revenues increased from $463 billion to $2,524 billion. Those
translate into a spending increase of 590% and revenue increase
of 550%. Over the same time, GDP increased from $2.5 trillion to
$14.2 trillion, a 570% increase.
California’s fiscal growth — both expenditures and revenues —
outpaced the federal government’s and the economy’s. By any
measure, California has spent itself into its current
circumstances. Because of that, Meyerson’s solution that the
problem would be solved by increased taxes is equally wrong.
There is also a fundamental political problem with Meyerson’s
argument that taxes could be raised. He states “raising taxes now
requires a two-thirds vote of the legislature…” The clear
implication is that a minority is dictating fiscal policy to a
large majority and that the state should “eliminate the
two-thirds threshold for enacting taxes [and] …end the process of
ballot-box budgeting through the initiative process…”
Amazingly, Meyerson fails to mention that six referenda on
solutions to the California fiscal mess were voted on just weeks
ago (May 19). California voted down five with at least 63% of
voters opposing. (The only one that did pass, with 74 percent
support, prohibited state lawmakers from raising their salaries
if the state budget was not balanced.) The most significant of
these failures was Proposition 1A. While establishing a state
budget stabilization fund, it also extended three tax increases
— a sales tax, a vehicle license fee, and a personal income tax
increase. Sixty-six percent of voters rejected it. The referenda
again disprove Meyerson’s theorizing.
Both fiscally and politically, Meyerson and the Left’s arguments
are simply unsupported theory that crumples in collision with
reality.
A lack of taxes? These have grown proportionally more than
California’s spending, more than federal revenues, and the
national economy. Still they could not keep up with the head
start California’s spending had.
Needed taxes stopped by an obdurate minority? The recent voter
rejection was overwhelming and bipartisan.
Meyerson’s real problem lies not with taxes, but with facts. And
California’s fiscal problem is with its own spending. A fact its
voters recognize all too well, even if the Left refuses to.
