national opinion

Monday Column
Carol Platt Liebau

[go to Liebau index]

Latest Column:
Stopping the Meltdown
What Beltway Republicans Need To Do

Subscribe to CRO Alerts
Sign up for a weekly notice of CRO content updates.

Jon Fleischman’s
The premier source for
California political news

Michael Ramirez

editorial cartoon

Do your part to do right by our troops.
They did the right thing for you.
Donate Today

CRO Talk Radio
Contributor Sites
Laura Ingraham

Hugh Hewitt
Eric Hogue
Sharon Hughes
Frank Pastore
[Radio Home]
















Jon Coupal- Columnist

Jon Coupal is an attorney and president of the Howard Jarvis Taxpayers Association -- California's largest taxpayer organization with offices in Los Angeles and Sacramento. [go to website] [go to Coupal index]

Is Half a Loaf Better Than None?
How did we get here from there...
[Jon Coupal]

The deal is done. And as a result, voters will decide in March whether to accept a $15 billion bond to "repackage" the existing debt incurred by Gray Davis and the Legislature as part of last summer's budget negotiations. The incentive to pass the bond is another measure appearing on the same ballot, a package of budget reforms intended to prevent future budget disasters. The two plans are "double joined" -- meaning that both the bond and the reform provisions must be approved for both to become effective. For example, even if the budget reform package passes by 75% of the vote, by its own terms, it does not become effective unless the bond passes as well.

The deal is controversial, not because the budget reform provisions are bad. They're not. If approved, they would mandate a balanced budget and establish -- for the first time -- a reserve account. The deal is controversial because Governor Schwarzenegger promised something much better; an effective spending limit fixing the amount of spending (adjusted annually for population and inflation) over which the Legislature would be constitutionally prohibited from exceeding. Regrettably, the Democrats in the Legislature successfully stymied his efforts.

In reflecting whether to accept or reject the proposals, voters would be wise to consider how we got in this mess in the first place. During the last four years the state engaged in massive over-spending. When the bills came due, Democrats said raise taxes, Republicans said cut spending. The result was instant deadlock. The temporary solution -- which was no solution at all -- was to borrow and thus delay the day of reckoning. This "nonsolution" was not only bad policy, but was legally suspect. Two billion of the credit card charge has already been stricken by the California Courts as a result of legal action by the Howard Jarvis Taxpayers Association.

In any event, these maneuvers were not enough to hide the extent of the problem from voters who took out their wrath on the sitting governor and replaced him with a candidate who said he could solve the problem without raising taxes. After surveying the catastrophic damage created by the previous administration and its cohorts in the Legislature, Governor Schwarzenegger proposed consolidating the questionable debt, on which the current year's budget was based, by asking the voters to approve, and make legal, the $15 billion bond.

Believing that the tax-and-spend crowd would be fearful of massive cuts, the Governor would demand a meaningful spending limit as the price to support the bond which would, in turn, prevent huge cuts in programs loved by the Democrats. But in what could prove to have been a tactical error, Schwarzenegger also publicly said he would spare most programs from major cuts. In so stating, he damaged his own bargaining position in the effort to force Democrats to accept a spending limit with teeth. For taxpayers, the end result is a mixed bag.

On the plus side, the Governor's tax cutting credentials remain essentially intact as he has not proposed any tax increases and, indeed, delivered on his promise to repeal the car tax. Second, state officials have properly acknowledged that borrowing must have the consent of the voters. Third, the budget reform package could help maintain the visibility of the spending issue, even if it is not true reform.

But this might not be enough for California taxpayers. Although Schwarzenegger started strong out of the box, he has failed to deliver on a specific promise. Despite some good excuses (he needed the Democrats, but they wouldn't deal) that alone is cause for nervousness among the sixty two percent of the California electorate who voted for fiscal conservatism. Second, that which was promised -- a real spending limit -- is very important to those same 62%. Now, if taxpayers want an effective cap on spending, they may have to look to the initiative process. But at this late date, it is unlikely a measure will reach the ballot before March of 2006, plenty of time for lawmakers to find ways around the limited restraints contained in the current reform package.

The only way the Governor can win the support of taxpayers for passage of the budget bond he so desperately needs to close the gap is to absolutely and unequivocally take tax increases off the table. In the absence of a true spending limit, he must use every opportunity to say that under no circumstances will he increase taxes to boost state revenues. And just as important, he must come out forcefully against upcoming ballot measures, like Proposition 56 this March, that are designed to raise taxes. Then, and only then, will the voters of California give him a pass on not delivering a true spending limit.

In the absence of such an unequivocal pledge, voters have little reason to support anything coming out of Sacramento.

copyright 2003 Howard Jarvis Taxpayers Association


Blue Collar -  120x90
120x90 Jan 06 Brand
Free Trial Static 02
ActionGear 120*60
Free Trial Static 01
Applicable copyrights indicated. All other material copyright 2003-2005