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Guest Contributor
Joe Armendariz

Davis Democrats and their 16 Wobbly Republicans...
The budget is bad for the state... recall them all...
[Joe Armendariz] 8/26/03

A few weeks ago, California's tax-and-spend Democrats with the help of 16 wobbly Republicans finally approved a budget that sells out the interests of California taxpayers. Why? In the case of the Republicans, probably so they would be liked by their friends across the aisle. Or, perhaps we can simply take them at their word; they were hungry, tired, and wanted to go home, eat a hot meal, take a warm shower and hop into a soft bed.

The reality is that the budget Davis proposed back in May, was better (on the margin) than the one the 16 Republicans voted for after holding out for the past several weeks. They ended up delaying only to cave and vote for a worse fiscal product. Remove the $2.3 billion in higher sales taxes and the Davis proposal was a more pro-growth budget than what the people ended up with.

Make no mistake about it, the so-called budget compromise, raises taxes on those who can least afford it and also on those least likely to tolerate paying higher taxes. The Motor Vehicle License fee will hit every driver, regardless of income. A single working mother, who drives a $25,000 car (which is the average price in California), will pay roughly $495 dollars in higher car taxes. A working class couple, with two average priced cars will pay roughly $980 dollars in higher car taxes.

California manufacturers were also told to take a hike in this so-called "bi-partisan" plan since the agreement eliminates the Manufacturers Investment Credit (MIC). This is the equivalent of RAISING TAXES on the industrial sector. And it is exactly the opposite of what the Milken Institute recommended in their "Manufacturing Matters" study, published in April of this year.

Since January 2001, California has lost over 295,000 manufacturing jobs. How do the tax-and-spend Democrats and their 16 wobbly Republican friends respond? They raise taxes on Manufacturers making it less profitable to do business in the state and less attractive to invest in needed equipment.

There is an old truism in economics; when you tax something more, you get less of it and when you tax something less, you get more of it. Apparently the Democrats and the 16 Republicans prefer more smoking and less manufacturing in California.

Voters should consider what they ended up with after waiting several months; the compromise actually spends $400 million more than Davis originally proposed, moves the same size deficit ($8 billion) into the next fiscal year, it includes the same amount of illegal borrowing, cuts roughly the same out of the state's bloated workforce, cuts deeper into higher education where taxpayers get more return on the dollar and it virtually mirrors Davis in per-pupil spending on K-12 which is already consuming 40% of the state budget.

But this is where it really gets ugly; Davis at least proposed eliminating Medi-Cal programs not required under federal law, but the compromisers voted to keep them. Maybe we should Recall the entire Democratic Caucus and their 16 Republican enablers too.

Joe Armendariz is Executive Director of the Santa Barbara Industrial Association and the Santa Barbara County Taxpayers Association.



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