Jon Coupal- Columnist
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]
Moment of Truth
An honest budget?…
[Jon Coupal] 1/12/05
For Californians, this week will reveal more about their future
as taxpaying citizens than at any time since voters recalled
Gray Davis and elected Arnold Schwarzenegger. This is the week
that the Governor gives his state of the state address and, while
the details of his proposed budget won't be known until next
week, he must tell us now if he intends to follow through on
some of his most important campaign promises.
The stark truth is, from a fiscal perspective, he has little
choice but to turn the ship of state sharply starboard. To port
is the rocky shore of collectivism and straight ahead is the
iceberg of status quo budget gimmickry.
Make no mistake. This is all about government spending. Despite
revenues being up over a billion dollars above projections (thanks,
in large part, to a stimulated economy) we are still $8 billion
in the hole on a year-to-year basis.
The holiday season
reminds us that some people can't control spending their own
money. But elected officials exercise that "most
delicious of all privileges -- spending other people's money." Thus,
the ruling political class in California is far beyond the "difficulty" stage
of spending discipline -- they are downright addicted. They are
addicted because their very political survival depends on distributing
public funds to groups or individuals that will support their
reelection and political advancement.
Sure, some public spending actually does some good in providing
a safety net for our most vulnerable and some funds actually
filter down to public classrooms where -- believe it not -- some
learning takes place.
But how much of public spending is actually wasted, or worse,
delivering destruction to our society? Unfortunately, a lot.
Fiscal conservative Tom McClintock has repeatedly pointed out
how our neighbor Arizona taxes less and gives its citizens far
more bang for the taxpayer dollar. How is that possible? The
main reason is that the political machinery in Arizona is not
owned -- lock, stock and barrel -- by the public employee unions.
So here we are. The "structural deficit" (the
fancy name for spending more money than is coming in) is simply
sustainable. The borrowing, fund transfers and other gimmicks
have been exhausted, so any further effort to delay the day of
reckoning is pointless.
Here is our hope:
That Governor Schwarzenegger presents an honest budget which
reflects a level of spending within a reasonable
forecast of revenues. Furthermore, he will need to "unscrew" the
budgetary restrictions which rob him and the Legislature of the
flexibility they need to address greater priorities over lesser
ones. This means attacking "auto-pilot" spending on
We would love to believe that the Legislature would join him
in this honest effort but, regrettably, we have watched this
institution over the last 30 years and our optimism is overwhelmed
by a cynicism born from these observations. Don't be surprised
if the Governor issues an ultimatum to the Legislature: Help
me fix the budget mess or the People will, via a package of reform
In a good sign for taxpayers, the Governor has put former Congressman
Tom Campbell at the budgetary helm. Mr. Campbell has a long and
impressive resume and is well-suited for a difficult task. His
quiet, thoughtful demeanor belies what we believe to be a strong
anti-tax philosophy. He may well prove to be the proverbial iron
fist in the velvet glove that California so sorely needs now.
The question is, how much authority will the Governor give his
new Finance Director? Hopefully, Campbell did not take the job
without at least some assurances that his views on fiscal issues
will carry the most weight in the Governor's eclectic inner circle.
Above all, California
needs a real spending limit. Fiscal conservatives begrudgingly
acquiesced to supporting Propositions 57 & 58:
One, a barely serious effort at fiscal discipline, the other,
a $15 billion refinancing of the Gray Davis debt. A real spending
limit must create a prudent reserve, it must have an inflation
factor that does not allow government to grow beyond inflation
and population changes, it should limit debt, and it should return
excess revenues to the taxpayers.
The taxpayers of California are among the most burdened in the
nation. They are entitled to budget sanity and effective use
of their tax dollars. CRO
is an attorney and President of the Howard Jarvis Taxpayers
2005 Howard Jarvis Taxpayers association