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Contributor

Ray Haynes

Mr. Haynes is an Assembly member representing Riverside and Temecula. He serves on the Appropriations and Budget Committees. [go to Assembly Member Haynes website at California Assembly][go to Haynes index]

Republicans And Taxes
The Middle Ground
...
[Ray Haynes] 7/13/04

I read a recent opinion from a columnist whose politics leans towards the more liberal side of the political spectrum complaining about Republicans opposition to taxes. He complains that Republicans are “carping” about Schwarzenegger caving into the Democrats on spending, and claims that some Schwarzenegger aide called Republicans a “sack of ingrates” because of that complaining. Republicans apparently should have been satisfied with the “budget victory” we got when the Governor reduced the car tax last year.

Let’s forget that Schwarzenegger promised to do that as a part of his election to Governor in the recall. Let’s forget that Davis illegally raised the car tax last year, violating the California Constitution. He also promised he would balance the budget without raising taxes. Republican legislators are a “bunch of ingrates” because the Governor upheld the Constitution and his campaign promises?

That’s a really low bar. I have to be grateful because you did what you promised me you would do? That is the minimum someone should do in life. The Governor didn’t owe Legislative Republicans an obligation to rescind the car tax and balance the budget, he owed that to the people of the State of California, who elected him based on those promises. An election promise is a solemn commitment. Anyone who advises the Governor that his promises should be ignored is risking the political capital of an enormously popular Governor. That is not smart.

More important, however, is that there are no spending cuts in this budget. There are a few reductions in the size of the increases, but there are no cuts. In the current year, the state will spend about $78 billion general fund; in the next budget year, the state will spend about $80 billion. That doesn’t smell like a spending cut to me.

But I am a simple man. I obviously don’t understand the realities of life—like when we increased spending from $57 billion in the 1998-99 budget to $79 billion in the 2000-01 budget (that’s two years for you and me)—how that was so critical to providing a better government. Of that $22 billion increase in spending, less than $3 billion was a tax cut (to the extent that a tax cut is an increase in spending), and Davis took that away when he increased the car tax.

The fact is that the left never cuts taxes when times are good, and they always raise taxes when times are bad. In fact, they always increase spending when times are good, and they never cut spending when times are bad. In every budget cycle, the taxpayers lose.

The middle ground in this endless cycle is to reduce spending growth and taxes in the good times, and freeze spending and taxes in bad times. It is the only rational way to keep the state on an even keel.

The columnist goes on to claim that “you can’t expect Democrats to … [cut spending] unless Republicans reduce their blockade of new taxes.” That might be a true statement if the Democrats had ever actually proposed reducing spending. They never have. They have never even proposed freezing spending. They didn’t even propose slowing down spending when we had record surpluses. Some Republicans actually gave in to the Democrats demands when times were good. That was a mistake. It is time to recognize the mistake, and reduce spending, and reduce it dramatically. The middle ground is to freeze taxes, and perhaps not reduce spending so dramatically.

Increasing taxes is not just politically unpopular, it is economically bad policy. We aren’t opposed to taxes simply because we think it will get us votes. California’s economic recovery is still sluggish and the cost of living and doing business here still exceeds that of our neighboring states. Anything that increases those costs puts our continued recovery at risk.

Much like the famous adage of doctors, our number one priority in budget writing ought to be “First, do no harm.” Not raising taxes protects that goal, but is the starting point, not the finish line.

And—if that makes us ungrateful—so be it. But it is good policy and good politics, and the sooner the Governor realizes that, the sooner he can benefit from it too. CRO

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