A post by Maynard
A quick note about the Tuesday’s election, for California peeps. I haven’t discussed this with Tammy, so she may weigh in differently…
I’ll be as brief as possible. The propositions are supported by Arnold Schwarzenegger, and there’s something of a “conservative” backlash against both Arnold and these propositions. For example, Darrell Issa (who was instrumental in the recall of Gray Davis) is urging “No” votes. That’s the line of the Howard Jarvis Taxpayers Association and of course VoteNoOn1a.com
Sacramento politicians don’t know how to say no to more spending. They’re so desperate to raise taxes, again, that now they have concocted Proposition 1A, which they claim is a spending cap. That couldn’t be more dishonest.
Prop 1A is a tax increase plain and simple. It extends three taxes that were set to expire, levying an additional tax burden on each California family of more than $1,100. As for the so called, “spending limit,†its nothing more than smoke and mirrors. It’s a limit that’s tied to tax revenue, so as long as Sacramento keeps raising our taxes, they can keep on spending.
I certainly understand and share the distrust, but is it possible this may be an ill-considered knee-jerk reaction? Considering the dysfunction of the state, maybe these propositions aren’t the worst thing that could happen. Tom Campbell, for whom I have respect, argues in favor:
1A – YES: This creates a real rainy day fund, and constrains the growth of state spending. Any increases above inflation and population growth have to go into the rainy day fund, until it totals 12.5% of the state budget. A minimum of 3% of the state’s revenues has to go into the fund until the 12.5% is met, once the growth in population and inflation from the previous year has been covered. This is almost as good as Prop. 76, the legislative version of which I authored, that cut spending across-the-board when revenue fell. The public employee unions defeated Prop. 76, but the Governor negotiated with them to hold off criticizing 1A; so this has a real chance of passage. The negative: when the Legislature passed the temporary increases in sales and income taxes, they said if real budget reform were adopted by referendum or initiative, the increases would last until 2012, instead of 2010. So, it’s a trade-off: short-term pain for long-term reform. I’d take the long-term reform, particularly mindful of the fact that Prop. 76 was defeated. This is our best hope for getting structural budget reform. One other point: a rainy-day fund is meaningless if it has no money in it. The continuation of the tax increases funds the rainy-day fund; otherwise, it will accumulate much more slowly. Remember, anything above the previous year’s expenditures, adjusted for inflation and population, goes into the rainy day fund; so that includes the money from the continued two years of tax increases.
He goes on to recommend “No” votes on 1B and 1C, and “Yes” on 1D and 1E.
I heard Tammy’s friend, John Phillips, note that the failure of Prop. 1A would probably work to the benefit of the unions, who will continue to bleed the state dry without those spending caps.
No point in arguing vehemently. It’s looking like the key propositions are going down to defeat, and it doesn’t matter what we say here. But I’m leaning towards voting as Tom Campbell suggests.
Rainy Day Fund? Aren’t you living in a perpetual budget monsoon season out there?
Honest honey, just give me one more chance and I’ll reform. Don’t fall for it.
Don’t get lost, Maynard.
Everyone from the Tea Party movement to Leonard Peikoff has come out against this monstrosity. As Peikoff pointed out, California already has the highest taxes in every category and this is just a grab for more. He took time during one of his podcasts (which he never does on political issues) to tell listeners to vote NO on it. Passage of this would only accelerate the out-migration of producers and middle-class workers who can’t afford to live in CA anymore. Reject 1A.
I agree with T. Campbell. I’m voting yes on 1D&1E and no on the other 2. I agree with Tom Campbell.
PaTricia
The rainy day fund will get raided (like with Prop 1B). The “spending cap” is only a cap so long as taxes are not raised.
Prop 1A will extend recent tax increases.
It is time to say “NO!”
We, the people, have to deal with less money. Our government has to deal with less.
Click on my link for more of my thoughts on this.
There is only one way to fix the California mess in my view. It probably won’t happen, but the best way to deal with this is to go bankrupt under chapter 11.
California could, under it’s reoganization affirm (agree to continue to pay) it’s bond debts. That would raise its credit rating, if it fully affirms the debt including its full interest obligation.
Next it needs to break all organized labor contracts and change the nature of a state employee to “public servant”. That would forbid them to strike, and allow the state to replace any striker with a new employee. Jerry Brown was the one who allowed the state workers unions to be moved out of that category, and into full barganing unit status (or whatever it’s called).
Last, the state needs to convert all state worker retirements to a 403B type account, similar to 401K. As it stands, state workers are in a defined benifit plan that demands that the numbers of state workers increase each year to support an ever growing number of retired employees. State government must grow to pay the benefits. The back stop is the taxpayer. We must pay the difference from the general fund. In the conversion, all payroll deductions for the retirement plan and all matching payments would roll into the private plan and the person would recieve money paid out on his/her schedule that they would define themselves. The money would be held by an investment firm and grow as managed by the choices of the participant. There would then be no great need to increase the number of state workers, other than the natural desire of our politicians to grow government in general. The defined benefit plan is a true ponzie scheme by definition, and should be constitutionally banned.
These three reforms are really the only way I can see to hit the reset button on this very out of control state government.
I’m with MrFixIt. There’s a reason we have a bankruptcy code. None of the financial institutions or the the automakers was ever really “too big to fail,” and neither is California. Part of the problem is that the public equates bankruptcy with failure, and is easily convinced that ANYTHING is better. But bankruptcy exists in most cases as an orderly way to PREVENT real institutional failure.
something is foul with how we ended up with 1E. part of the reason we’re in a huge deficit is we’ve chased away many millionaries out of CA by singling them out to exclusively fund this mental health program that has yet to get off the ground. now that there’s money in that fund, we want to reallocate it?
the same thing with 1D. we tax cigarettes a whopping $0.50 cents a carton for “children’s health” only now that there’s money in that fund, we want to rob it to close the deficit.
the cynic in me feels the government continues to spend because it knows it can rob these voter-passed exclusively funded programs when the state is in a “crisis.” this is why institution of new programs, even when they claim “without raising taxes”, should be buyer beware. one way or another, you’re feeding the beast and that appetite only grows when redistribution programs have underspent money.
I’m voting “NO” on 1A-1E and
“YES” on 1F
if capping spending is a concern, we need to revisit Prop 76, not accept higher taxes for an extended term.
Campbell thinks 1A is a legit spending cap; Tom McClintock thinks the cap is a lie and a sham.
McClintock has been more clear and thorough in his analysis of Cal budget issues than anyone in the state. I think I will trust his analysis on this one.
The Republican party will remain dead in the state as long as politicians like Campbell are able to undermine the core value of limited government that the party should be standing for.
Even facing complete default, some republicans are out there looking to compromise on the supposed core values of the party. This is the perfect time to take a principled stand. Instead they want to compromise the party into oblivion.
Mcclintock on Prop 1A: Extend the Tax Increases. NO. This is the fig leaf that hides certain deficiencies suffered by the legislators who caved into pressure for the biggest tax increase in California’s history. This measure EXTENDS the tax increases for up to two ADDITIONAL years in exchange for a spending limit that doesn’t limit spending. The “spending limit” is laughable – it requires placing “unanticipated revenues” into a special fund that is then to be spent for a variety of additional purposes including education, debt service and health care. And since all funds are interchangeable, this merely allows funds spent for one purpose to be shifted for another. The bottom line: If you were against the tax increase, you’re against Prop. 1A
I voted no on all of the propositions, they were all authored by a California legislature that is more interested in preserving their pay rates, their staff’s payrates, and the union’s pay rates… nevermind the expense to the tax payer and to private sector businesses, who have less and less money to reinvest in employing people who would rather work for a living than make a living off of other’s work.
I hope the government of the state of California goes bankrupt, I hope none of the incompetents in the legislature receive a single additional paycheck from now until the day they are removed from office. Since they’re only working for themselves and the public employee unions, let them collect their paychecks from the union coffers instead of the California budget.
In other words… they can take a hike, and so can any legislation they author from here on forward.
just voted NO across the board, save 1F
he may not be Spock, but he’s definitely Tuvok. I’m really only familiar with Star Trek Voyager, and ever since Obama, it’s hard to watch Tuvok anymore without an uncomfortable feeling at the similarities. and i’ve always found the prime directive to be creepy-U.N.speak, such as when Janeway lets it possibly get in the way of the safety and security of her ship. i think Obama would be all about that!
A long time ago I decided to hold the politicians feet to the fire, so I vote against any bond, tax increase, or other measure that allows them to pass off popular issues to the voters while burying their pet projects in the budget.