The following letter to the Ventura County Star is in response to an opinion column by Assemblywoman Audra Strickland from June 14, 2009.
Once again Assemblywoman Audra Strickland wastes three columns of print on the Opinion page of the Sunday Star. She calls for the legislative leadership to reform and streamline the budget process, yet she tells us that only five elected officials really craft the state budget – three Republicans and two Democrats. So who is to blame?
Our legislature is at a stalemate. Democrats hold the majority, yet they can’t get the 2/3 majority vote required to pass a budget because Republicans refuse to sign off on raising revenue to cover critical services. Therefore, it is minority Republicans who ultimately decide the fate of California’s budget process.
Strickland complains about “dark-of-the-night” deals, but as I recall it was just such a deal by Republican Senator Abel Maldonado that garnered promises not to increase certain taxes and also resulted in a series of ill-fated propositions being placed on the May ballot. Hindsight shows us that Californians not only rejected this Republican trick, but in so voting actually acknowledged a revenue rescue was necessary.
So why is California really in the mess it is in? Despite the waste and pork barrel spending Strickland dwells on relentlessly, the biggest culprit is an anticipated
decrease in state revenue. We will see revenue shrink from about $100 billion to only $83 billion this year due to the global recession. That’s a 27% decrease in money the state has to spend. In an attempt to fill an expected $41 billion deficit, California could fire every state employee—including prison guards and university professors—close every government office, stop all travel and even cease the purchase of paper clips without closing the budget gap. The government would be gone but the deficit wouldn’t. It’s time for Strickland (and Republicans) to get real and acknowledge that it will be impossible to fix the budget deficit by eliminating waste and cutting programs.
A combination revenue rescue combined with cuts in non-essential spending is the only answer and we have just a couple of weeks to make it happen. I’ve seen a number of proposals, but at a minimum we should join every other oil-producing state and tax oil extraction at 9.9% (Alaska is 25%). Second, we should impose a dime-a-drink alcohol tax, a cigarette tax and a medical marijuana tax. Next, we should restore top income tax brackets of 10 and 11 percent (up from 9.55% max) on incomes of $250,000 and above, and establish a 3% withholding for all independent contractors who earn more than $600 per year.
Then, the Legislature should reverse three expensive tax concessions to businesses that were offered up as bribes to Republicans in September 2008 and February 2009. These breaks allow, among other things, corporations to share credits with affiliated companies allowing them to use this year’s losses to obtain rebates on prior-year taxes. The legislature should also update rules governing the assessment of commercial property that allow companies that own commercial real estate to avoid having their property values updated, except under unusual circumstances.
Next, restore the vehicle license fee to 2% – the rate when Gov. Schwarzenegger took office. Then phase out obsolete and ineffective Enterprise Zone tax breaks. Reduce the State sales tax rate from 5% to only 3% but extend taxes to all services. The state could also end multinational tax sheltering and eliminate the tax loophole on like-kind exchange of commercial property. Additionally, mortgage interest deductions should be limited to the owner’s primary residence.
We could save $1 billion in five years by converting all death sentences to life in prison without possibility of parole. And last, but not least, we could use $4 billion of the $4.5 billion rainy-day fund Gov. Schwarzenegger has budgeted to help reduce the projected deficit. It’s not just raining, there’s lightning and thunder!
A combination of these and other revenue rescue proposals could easily add up to $20 to $30 billion, spread the cost fairly among individuals and business, and go a long way toward cutting our deficit and saving vital programs and services.
Our state needs courageous leadership. I call on everyone to urge your state legislator to oppose an all-cuts budget.
— Bruce Little lives in Camarillo and is a small business owner
