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A Further Perspective
Jerry Swings for the Fences
He thinks he has California taxpayers right where he wants them.
School boards over the years, when faced with opposition to a bond issue, have often resorted to a doomsday threat to get voters in line. If the bonds don’t pass, they would say, school sports — starting with football season — will be canceled and the school band disbanded.
California’s once and current governor has dusted that one off and is aiming it for the fences. Early this year he began promoting a tax increase package for the November ballot, telling everyone that if it were to be defeated at the polls in November, the public will have been forewarned that drastic budget cuts would follow. By early April it had 54 percent support in a poll.
He touts his tax increase measure as “temporary.” (Ronald Reagan one said, “The nearest thing to eternal life on earth is a government program.”) It would raise the state sales tax to 7.5 percent from 7.25 for four years. It would also raise income tax rates on those earning $250,000 or more a year (“millionaires and billionaires” as defined by Mathemetician-in-Chief Barack Obama). Those making $1 million or more would see their rate go from 10.3 percent to 13.3 percent — easily the nation’s highest. With more of the investor class changing their residences to income-tax-free states every year, one guess as to what will be the effect of that increase.
Complications have set in. In addition to Brown’s proposal having gathered enough signatures for the ballot, so have two others. One, headed by a hedge fund manager, Tom Steyer, would eliminate the choice companies now have to use a tax formula based on California sales in proportion to sales elsewhere or one based on sales, payroll and property only in California. Steyer’s measure would eliminate the first option. Its purpose is to raise revenue for the government.
The third measure, headed by “civil rights” attorney Molly Munger, would raise income taxes on a sliding scale for all but the poorest California workers for the next dozen years. The purpose is the same as Steyer’s: to raise revenue for the state. It would make tax rates on higher income Californians even more lopsided than they are now.
Brown had been figuring on raising about $6 billion or so to erase most of a projected $9 billion budget deficit. That is until a few days ago when the state’s green eyeshade people delivered the bad news that the deficit would be $16 billion, not $9 billion. The reason? Tax collections and other revenue this spring were well under estimates.
Bad news for Brown? Not if he can use it to scare the voters into doing his bidding. It helps him make his threats all the more real. He talks of deep cuts to school budgets and aid to poor and ailing seniors — on top of already-announced closings of state parks. Wave the specter of cuts to education at California voters and they usually succumb.
Several years ago they voted for a ballot initiative that has required about 40 percent of the state’s general fund go to education. This has not brought higher student performance, but in more than a few cases it has brought a surplus of school administrators.
Not mentioned in the governor’s list of cost-saving targets are bloated public employee pension programs. In his first iteration as governor in the late 1970s, he signed the order permitting public employee unions to engage in collective bargaining. Gradually, but steadily, they have become the state’s most powerful special interest. They virtually own the Democrats’ legislative majority. A few months ago, Brown sent up a trial balloon to require state employees to pay more into their own retirement accounts and health care plans and to have less generous programs for new hires, but the unions and the legislative Democrats punctured the balloon.
Brown’s proposal to cut state employee salaries is another trial balloon. It will drift away with the next breeze. And if you think he’ll cut expenses by eliminating the FY 2013 budget’s $2.3 billion allocation for that chimera, high-speed rail project, you are living in a dream. He sees that as his “legacy,” but at the rate he’s going his legacy will be bankruptcy.
Nevertheless, Even California voters are uneasy about high taxes and deficit spending. With three tax-increase measures competing on the ballot, they just may say to all three, “Nuts!”
Peter Hannaford’s latest book is “Reagan’s Roots.” He was closely associated with the late President Ronald Reagan for a number of years, including serving as director of public affairs in the Governor’s Office.
About the Author
Peter Hannaford was closely associated for a number of years with the late President Reagan, beginning in the California Governor’s office. His latest book is Presidential Retreats.
Letter to the Editor View all comments (60) | Leave a comment
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Darin| 5.18.12 @ 6:38AM
Jerry swings for the fences. Smart Californians of means are climbing over the fence to get out.
oldfart| 5.18.12 @ 7:13AM
http://articles.latimes.com/20.....e-20111127
As referenced in this LA Times article, people are voting with their feet. One thing this does accomplish is that it has 'Left Behind' (reference intended) those who are dependent on the Sate for their existence. The people that a leaving are looking for jobs to support themselves and their families. Oops – working people pay taxes.
You see that is one thing President Ego and Governor Moonbeam do not understand. You can tax a business all you want – but a business only collects those taxes from the eventual end consumer in the price of the product. Hello out there - the consumer gets hit for EVERYTHING!!!
Well I guess Governor Moonbeam will have to raise taxes again in his continued poker bluff while he holds a pair of ducks while those who are leaving hold a better hand.
TLP| 5.18.12 @ 7:31AM
Think: ZIMBABWE.
old white guy| 5.18.12 @ 7:39AM
it is a good thing california does not have the power to print money.
Occam's Tool| 5.18.12 @ 11:09AM
I got my psychiatry training at UCLA, and finished my training on June 17, 1993. On June 18, 1993, I was on a plane to Chicago to see my parents before moving to Alabama to start my first practice, never to live in LA again (I don't think I have visited LA since 1995, by the way). The smartest decision I ever made was adopting my kids. The second smartest was marrying my wife (she would want me to put (1) and (2) in that order, as well). The 3rd smartest was June 18th, 1993.
California is a slow motion disaster.
Frank Drackman| 5.18.12 @ 12:49PM
I wouldn't be so quick to rule out LA as a practice location..
I mean if there's a place that could use a good shrink its LA(Lower Alabama)
Frank
TLP| 5.18.12 @ 7:43AM
How wonderfully apt, this Story's Title is.
Just imagine all of the Money that all of the Beautiful People would have, RIGHT NOW, if only they DID have FENCES along the BORDER? All the money they would have saved on Welfare for Illegals. Medicaid for Illegals. Police, Courts, and Prisons for Illegals. Think how UNCROWDED the Schools would be. How much SAFER the Streets would be.
Now, put this in to perspective. These LEFTISTS, who ARE the Democrat Party, have the Exact same position on Missile Defence, as they do on Fencing our Border. The Exact same position on Criminal Justice, as they have on Fencing the Border. The Exact same position on Voter I.D. Cards.
I think they call what we're going through - A Death Spiral.
Von Mises Jr| 5.18.12 @ 10:05AM
As usual, Statist like "Luna" Moonbeam fails to deal with the root causes.
First and foremost are the public pensions. Vallejo was in the news in 2010 raising public employee retirement age from 50 to 55 http://www.bloomberg.com/news/.....ting.html. I have heard of teachers in CA retiring with six-figure pensions.
Second is "affordable housing" and "Open Spaces." As Dr. Sowell (Stanford) writes, "affordable housing” means builders will not build new units to lose money. "Open Spaces" makes existing home prices as much as three times the cost of similar housing elsewhere. Middle income families working in San Francisco cannot afford to live in the city or suburbs.
Anthony| 5.18.12 @ 8:23AM
Yeah, and that's the only fence that will be built, to keep the earners from leaving California.
Appleby| 5.18.12 @ 7:03AM
He did this the last time he was Governor, which is one of the reasons I moved back to the East Coast. Fortunately so far he hasn't found any way to charge an Exit Tax for leaving California and taking your goods and chattels and your business with you.
benny havens| 5.18.12 @ 8:11AM
The exit tax is on its way. Obama, Reid and Pelosi have installed a 3.8% sales tax on property to pay for Obamacare. If you are tired of the over taxation in California and you want to move elsewhere, be prepared to pay for this tax come 2013. Let’s hope the SC takes it down. But is this type of a tax in Moonbeam’s plan for the future?
Shamus| 5.18.12 @ 9:03AM
There already is an exit tax. If you ever had any source of income from California, then you must file state tax returns there for the rest of your life. If you don't, then the state claims that all your income comes from California and bills you for tax due. They like to open up audits for tax years long past and claim that you owe interest and penalties. Then it's up to you to prove to the California tax authorities that you don't owe them money. Needless to say, the tax authorities make that really hard to do. It's just a shake down of people who've had the misfortune of abiding with these lunatics.
JP| 5.18.12 @ 11:02AM
I've never heard of that one. I think the Constitution would have something to say about that. California's taxing authority stops at the state lines. But who knows? Perhaps one day, Govenor Brown will send out hundrds of Bounty Hunters to arrest and capture anyone who lived and worked in California. In that case, we are moving back to the Middle Ages.
RJ| 5.21.12 @ 4:03PM
Years ago, I heard that California goes after former residents with pension income which was derived while they were working in California. It was my understanding that the Federal government put a stop to it, however a few weeks ago a financial adviser mentioned that California still does it. Something for California residents to look into. On a related point, California has high sales and income taxes, however it does not have an inheritance tax. So that is one rare area where it is better than other states.
taterblade| 5.18.12 @ 4:52PM
Not exactly true. The ObamaCare tax is 3.8% of capital gains profits over a threshold amount (usually $250K) - Still sucks though...
Dennis| 5.20.12 @ 2:41PM
In the last census, California lost two representatives. New York State once had 55 representatives; now it has 29. People vote with the feet and are moving to low tax, business friendly states such as Florida or Texas.
nathan| 5.18.12 @ 7:12AM
And again those "drastic" cuts don't involve the high speed rail line no one is going to ride and which will pull at most based on data from Europe and Japan maybe two percent of the cars off the road in the corridor it's being built in. But California like most places tend to get the governments they deserve. No one forced them to elect this guy or the legislature behind him.
Frank Drackman| 5.18.12 @ 7:28AM
I know I'm dating myself, well not actually dating myself, but Jerry Brown was MY governor as a Wee-Lad.
He even came to my Elementary School when we got a new Li-berry.
And he was COOL, Ray-Bans, sideburns, drove a battered State of California Dodge Polara, and he was dating that chick responsible for my Flexor Carpi Ulnaris Hypertrophy,
LINDA RONSTADT,
I mean in 1975 she was right up there with Raquel Welch & Sally Struthers(WHAT, Oh sure, I'm the only one who rubbed one out to a 1974 Sally Struthers)
Now its 40 years later, he's still Governor, and I'm still rubbing em out to Sally Struthers..
I mean Linda Ronstadt.
the 1975 Linda Ronstadt.
Frank
SeymourGlass| 5.18.12 @ 10:55AM
So... you ARE in fact "dating yourself".
Are you a cheap date? I'm guessing "yes".
Occam's Tool| 5.18.12 @ 11:11AM
Yeah, she was a babe, and he was a wee-wee head even then.
Hey, even Freud could never figure out what women want.
Frank Drackman| 5.18.12 @ 12:54PM
"A man who has been the indisputable favorite of his Mother keeps for life the feeling of conqueror, the confidence of success, that often induces real success" Freud, 1924
or at least thats what I used to tell the guys when they'd give me shit for my Mom givin me a rub down after the game...
hey, its not as creepy as that TIME cover
Frank
gearjammer| 5.18.12 @ 4:39PM
Just a friendly warning the meathead is a jealous guy.
W| 5.18.12 @ 7:49PM
Frank,
Do you mean Repetitive Motion Syndrome, carpal tunnel?
Linda was a babe. Sally wasn't bad when young, but she had to put up with the loser Meathead.
martin j smith| 5.18.12 @ 7:35AM
When Communists are faced with Communist Policies affecting them they begin to run for the hills.
Purple Lips| 5.18.12 @ 8:23AM
"School boards over the years, when faced with opposition to a bond issue, have often resorted to a doomsday threat to get voters in line. If the bonds don't pass, they would say, school sports -- starting with football season -- will be canceled and the school band disbanded."
And I've always told my neighbors let the schools go broke! If a school district spends millions upon millions on things like arenas, gymnasiums, olympic sized swimming pools, and state-of-the-art auditoriums they deserve what they get.
And California is out of money -litterally. Unless Brown has found the legal means to confiscate private property his state will not survive 2013. And don't think for a minute that the wealthy trust fund babies and sodomites of San Fran are willing to give up thier swell condos and yachts. Don't think for a minute that the Venture Capitalists of San Jose and Malibu don't know how to move thier cash to Austin or Hong Kong. The gig is up.
The next phase of this tragedy is for the State of California to deploy drones and storm troopers. Don't think for a minute they won't
tsd| 5.18.12 @ 8:33AM
The fools in California make the rest of us look good. All the rich liberals in Hollywood who talk smart will squeal like little spoiled kids when you go after their stuff. Keep pissing away your future California, just do not expect the rest of us to bail you out!!
Shadow| 5.18.12 @ 8:54AM
Jerry Brown and California Dems will have Barry writing a check late on a Friday afternoon and most of the nation will never hear about it. It will be disguised as training for the unemployed or stimulus money for underwater mortgages, but it will happen. The fall is coming, it will just be postponed until the demise of all States, counties, and cities is no longer preventable.
Joe Callan| 5.18.12 @ 10:29AM
Ahhh, the joys of Liberalism! All the neat stuff other peoples money can buy, until those other people move somewhere else!
cowgirl| 5.18.12 @ 10:44AM
Anyone interested: Go to Gov Moonbeam's website and take a look at his budget. To save you the time here is fact:
$61,000,000 of the CA State Budget goes to K-12 education. The bulk of that $60,000,000 is salaries and penions. What does CA get for that amount - 47th in the Nation for math/science testing in 8th grade. Yippeee!!!
$23,000,000 for Higher Education - Junior/State/University level. The bulk of that going to salaries and pensions.
The $83,000,000 spent on education in CA is over half the budget. The remaining leech of course is entitlement programs.
California - The Stupid State.
Ground Control| 5.18.12 @ 11:23AM
I think you dropped 3 digits. That should be $61,000,000,000 (Billions). But you are correct. After Prop 98 some years ago, K-12 gets, BY LAW, a minimum of 40% of California's budget. Government Schools are the most grossly overfunded bureaucracy in California, or all of America for that matter. That Teacher's make so little of it is disgraceful. The bulk of it goes to bureaucrats and overhead. More "centralized" planning from government. Those who look to government as the beginning and end of life and the provider of all things are frankly sick people. History has taught us one thing above all: government is inherently corrupt and self-serving. California has the most corrupt government in the Union, which in many ways serves as a model for the US government.
Just for the record, I have lived all of my life in the Golden State, but have never voted for a successful House of Representatives candidate and haven't voted for a successful Assemblyman or State Senator in about 30 years. The people I vote for always lose. And the ones who win are almost universally dim-witted boobs.
cowgirl| 5.18.12 @ 11:59AM
Yes I did drop 3 digits. It is billions. I too have lived in the Stupid State all my life. I also vote for the people who lose so don't feel alone.
The bulk of the voters in California are mentally ill. I have tons of liberal friends in CA and they know there is a problem with the government here, but they keep pulling the voting arm for the same people who keep making the same decisions that put California into the same bucket of crap every election.
It is a mental illness. There is no other explanation for it.
Again - thanks for the correction.
Ground Control| 5.18.12 @ 1:50PM
Maybe we know some of the same mentally ill people. :-)
randyinrocklin| 5.18.12 @ 11:12AM
be prepared to get a speeding ticket from one of those drones...gotta raise more revenue...check your mail and voila you just recieved a citation for speeding because some drone up there caught you speeding.
Ground Control| 5.18.12 @ 11:27AM
They need the revenue to pay for the drones.
Ground Control| 5.18.12 @ 11:25AM
Just a thought: Players who swing for the fences have a high tendency to strike out. Brown may lose this one, as even California voters seem to avoid raising taxes.
Old One| 5.18.12 @ 12:04PM
As a recently departed 62 year resident of California I have seen firsthand the destruction of California by leftist democrats. The destruction in reality began with the 1958 election victory of Moonbeam's father Fat Pat Brown and his creation of a parasite welfare class of recipients fueled by Kennedy's immigration law changes during the reign of Lyndon Johnson.
The takers are now the clear majority in California and will raise taxes until all the taxpayers leave the state (as will happen).
The affluent coastal neighborhood where I formerly lived is now an emptying one, Many of its lifelong and even miulti-generatioanal owners have purchased homes in lower tax western states andthe neighborhood's spacious stately homes have become nothing more than unsaleable items used as vaction accommodations of departed former Califorrnia taxpayers now resident in Arizona ,Tesxas, Nevada, Utah, or Wyoming to name a few rfuge states.
It took 54 years of democrat control of the California legislature to turn the scorching barren deserts of southern Nevada & Arizona for my once neighbors & myself into alluring paradises.
The only task that remains for the brainless wrinkled dessicated Moonbeam is to arrange for the burial of the once Golden State and its masses of putrifying welfare parasites & bottom feeding lawyers poisoning the air of bordering states.
yual| 5.18.12 @ 1:31PM
g
Clemmie| 5.18.12 @ 1:38PM
I live here and can tell you right now that those ballot initiatives will pass. The majority of Californians voted for Boxer and Brown in the last election. We are doomed.
wolflen| 5.18.12 @ 2:11PM
i agree..as "crazy" as it sounds..threats to cut funds to "non functional" schools seems to work in a state that thinks building a subway in a quake fault area is a great idea and a 100billion price tag on a high speed train to nowhere..that will take 20+ years to complete is even a better idea..yeah..it all makes perfect sense..
it just makes one wonder..a state that had the best schools in the country 40 years ago..has now become the poster child for "best dressed third world country"
RJ| 5.18.12 @ 7:14PM
I live in California too, and I am not so sure the tax initiatives will pass. As bad as the Republicans have done, state wide propositions have a much more mixed record and Californians did defeat the last round of tax initiatives. Perhaps some will sign on to taxing "the rich" more, but raising their own sales tax rate is something else. Time will tell. Keep fighting the beast, because there is always hope.
Bobloblaw| 5.20.12 @ 10:31AM
You have a point:
CA is more conservative than it is GOP and less liberal than it is Democrat. This is why I think the CA GOP should disband and simply become the CA Conservative Party. Their congressional members wouldnt be in the GOP but obviously would vote for the GOP speaker and support most GOP legislation.
KDW| 5.18.12 @ 1:52PM
There is no reason for Moonbeam to drastically
cut public services if he doesn't get his tax increase.
That would be a toxic choice not a necessity. What
Moonbeam needs to do is start pruning the state
employee head count and I don't mean teachers
or police officers. Tens of thousands of bureaucrats
should be removed from the state payroll especially
those hired after Gray Davis took office. Salaries
need to be cut and pensions revised. These are the
only steps that will restore a semblance of fiscal
sanity to California.
If Moonbeam chooses scorched earth on public
services voters should move to recall him. It
might do wonders if California Governors know that
total abdication of their fiscal responsibilities
will always lead to recall fights.
SUBVET| 5.18.12 @ 2:53PM
Gee......I don't know how to respond to this. I have lived in the gloden state my whole life, I guess the reason I never moved was (bare with me here) I am having a Ben Stein moment.
Back in the day California was the best place to grow-up surfing, skiing water/snow the weather was the best. For a young kid eveything was here everyone wanted to do what we were doing crusing/drive-ins. Songs were written about us and our lifstyle.....life was great.
Fast foward 66 yrs. and it's turned into a progressive toilet bowl. This state proves that the democratic/progressive way of running a state is wrong. The polititions are evil and don't care about anyone but themselves. I am part of a minority here and can't do much with my vote.
The drones here deserve everything they get....they were stupid enough to relect Brown for a second time. This father was no better. Between Jerry and the beaner mayor things couldn't get worse.
I just keep playing Surfing USA on my motorola 45 player under the dash of my 56 chevy..... if I want to really get crazy I will turn on the vibrasonic player.
Would I do it again.......thinking back.....hell yes.
gearjammer| 5.18.12 @ 4:45PM
I hope you are up to date on taxes-or else they'll grab the chevy and auction it. Do they recquire a surfing license yet ? Do they tax the boards ? If not, it will be reality.
Skippy| 5.18.12 @ 3:54PM
My friends, a lifelong Cal. couple, moved to Florida right after the 2010 elections in which every single Democrat won.
I cannot afford to leave, nor do I wish to.
I will sink with my ship.
gearjammer| 5.18.12 @ 4:42PM
It will be a titanic moment.
Calvin| 5.18.12 @ 5:58PM
Not really. There will just be an over abundance of potential WalMart greeters that used to rely on fat government pensions. No bail outs. They had their chance and decided to sit pat. Maybe Jerry Brown and that functional idiot RCV can help them out.
Bill| 5.18.12 @ 4:07PM
My sister-in-law needed to make significantly more money. So she took a California state job in nursing and made more than 300,000 dollars. After a little more than a year she returned to her old 150K in the South. I would think a few cuts in goverment payroll would do the trick in California.
Occam's Tool| 5.18.12 @ 5:35PM
Frank, I practiced in Upper Alabama for a while, and did some work in a nursing home in Montgomery. I do like the fact that you played with the LA joke, however. that's how you can tell a man who lived in 'Bama for a while....(the best BBQ I ever ate was at Johnny's in Cullman, AL).
Frank Drackman| 5.19.12 @ 9:24AM
OMG,
Nursing Home? Montgomery?
you might have written a Duco-lax order for my Great Great Grandfather, Nathan Bedford Robert E. Lee Forrest Jackson Shemp Proudfoot Drackman...
a 1/256th red-blooded Choctaw, and if I hadn't checked the (Tomahawk Chop Gestrue)box on the AMCAAS application I'd probably be selling F-150s' today.
"Nate" rounded up the "Comfort Women" for the Confederates down time, and I'm not sayin things would have been different if he'd been at Little Round Top but......................
Jeffy Davis needed him for a, shall we say,
"Special" Ass-ignment...
Frank
Occam's Tool| 5.20.12 @ 11:50PM
Frank, my dear man, I do not recall how many people I met in Alabama named Robert E Lee whatever...you are a riot.
Old Counselor| 5.18.12 @ 10:25PM
I know of one retired school administrator who has purchased property in Florida so he and his wife can escape the relatively light income tax of WV. Can one imagine how many California educators have done/will do the same, all while banking their very generous pensions?
POST American| 5.19.12 @ 12:57AM
---Great piece!
NOW, how about a little quality coverage
as the first of the ocean debris fields from
the greatest world nuclear disaster in human
history, FUKISHIMA, reaches California?
------tick! ---tick! ---tick! ----tick!
Bill| 5.19.12 @ 2:44PM
CA? Paradise lost to those amigos in LA. It ain't gonna comeback.
Thomas Bullock| 5.19.12 @ 4:36PM
Memo to Brown, THERE IS NO SUCH THING AS A TEMPORARY TAX!!!!!!!!
James Van Dorn| 5.19.12 @ 7:52PM
"Moonbeam" is a Liberal Socialist and NEVER met a tax increase he didn't like. What's he gunna do tho, when all the business and industry is relocated out of the Golden State, all the wealthy folks have relocated to other states and the only people left are illegal aliens, gays and the Hollywood elite? Will Hollywood pony-up the TAXES "Moonbeam" will demand, or will he opt for an Obama bailout?
ebonystone| 5.20.12 @ 1:17AM
Drop high school football? If only they would! It's nothing but a waste of money. And besides the money, it's a waste of energy. H.s. games are all played at night, meaning a huge waste of electricity. And then there's the gas wasted taking the teams and spectators to the games. I've always been surprised that the environmentalists haven't been complaining about this.
And basketball is even worse, since it's played inside, and so needs heating as well as lighting.
Ditto for university football and basketball. Professional baseball clubs maintain their own minor league teams, so why do the professional football and basketball clubs get free, taxpayer-provided minor leagues? If a private college wants to have these sports, that's their business; but state colleges should not get a dime of taxpayer money for them.
Dilbert| 5.20.12 @ 4:06PM
If we close all the government schools, that should be good for a 100 point increase of children's IQ's.
blackwatch| 5.21.12 @ 3:36PM
memo to Jerry Brown, how about we put 30 million more people pulling the cart? If you want to raise money put a 2% tax on ALL goods and services--that way everyone has some skin in the game.