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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]

The 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 not 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 programs.

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 initiatives.

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

Jon Coupal is an attorney and President of the Howard Jarvis Taxpayers Association.

copyright 2005 Howard Jarvis Taxpayers association

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