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Carol Platt Liebau - Columnist

Carol Platt Liebau is a senior member of the editorial board. She is an attorney, political analyst and commentator based in San Marino, CA, and has appeared on the Fox News Channel, Orange County News Channel, Cox Cable and a variety of radio programs throughout the United States. A graduate of Princeton University and Harvard Law School, Carol Platt Liebau also served as the first female managing editor of the Harvard Law Review.

Slap the Greedy Hand
Authorizing Local Taxes Is Just Plain Wrong
by Carol Platt Liebau 6/9/03

California’s greatest governor, Ronald Reagan, once observed that a government with the power to give the people anything they wanted was also a government with the power to take away everything they had.

Without having done the former, the California legislature seems hard at work on the latter. Just last Wednesday, the Assembly approved AB 1690, which will authorize cities and counties to join the state and federal authorities in placing a clammy, grabby governmental hand into every taxpayer’s pocket. Because the bill was co-written by John Burton, president pro tem of the Senate, rest assured that it will get a full and enthusiastic hearing in the tax-friendly body over which he presides.

Californians already pay $130 billion in taxes – and has lost more than 285,000 manufacturing jobs since January of 2001. Yet many state legislators are so greedy or so stupid that they would blithely add another layer to the tax burden already borne by California businesses and citizens. Local income taxes will simply mean that people who actually pay taxes will simply leave the localities that impose them – just as California businesses and citizens have increasingly moved to more taxpayer-friendly western states like Nevada, Idaho, Utah and Texas. When will California’s “leaders” understand that a state or a city with a hounded, diminished tax base will never enjoy a healthy economy?

But notwithstanding their lack of compassion for ordinary taxpayers, the pro-tax legislators in Sacramento are certainly cunning. They apparently understand that those of us paying their salaries are considerably less enthusiastic about tax increases than they are. Hence the structure of the bill – specifically designed to evade the requirements of Proposition 13.

The California Professional Firefighters are the “godfathers” behind this bill, and – coincidence? – AB 1690 requires that any locality imposing the tax simultaneously increase funding for public safety services. This increase wouldn’t be straightforwardly appropriated from new local tax revenues, of course. That would constitute a “special tax,” subject to a two-thirds vote under Proposition 13. Instead, the bill contemplates a little fiscal bait-and-switch.

Rather than paying one’s locality directly, taxpayers would instead pay the Franchise Tax Board, as they do with their state taxes. The money derived from the imposition of a local tax would then be transferred to the appropriate locality as discretionary funds, not specifically earmarked for public safety (and therefore not a “special tax” subject to Proposition 13). But – and here’s the kicker! – every taxing locality would be required to transfer half of every dollar raised through the local tax to enhance public safety programs. So, suddenly, the Professional Firefighters would enjoy increased funding, and – better and better (for them!) – their increases would be locked in with a specific formula, all without the inconvenient encumbrance of having to follow Proposition 13, voted in by California’s citizens.

AB 1690 is as dishonest as it is greedy. Rather than being willing to seek the public safety increases on their merits, the California Professional Firefighters and their toadies in the legislature are seeking a convoluted means to assure themselves of never-ending funding, with nary a thought to the fiscal well-being of the Californians they are supposedly dedicated to serving. And, of course, too many of our legislative rulers sense that they derive their power only from their ability to redistribute our tax money – so whatever the impact, nothing is too great to curb their desire to extract ever more funds from those unfortunate enough to be governed by them.

After public debate and discussion, should it be determined that local public safety programs need more money, legislators should obtain it first through one straightforward means: stopping the fraud and abuse that poisons so many of the programs they have authorized and appropriated. The California Taxpayer’s Association reports that more than $10 billion dollars have been lost to fraud and abuse in state and local governments over the past four years.

Before they grab once again for our pocketbooks, let the legislators figure out why the Department of Corrections had to pay an additional $200 million in overtime for replacement corrections workers, once its employees had a contract that inhibited their superiors from challenging their use of sick days. And perhaps California’s state employees could forgo two of the 13 paid holidays they receive over the course of a year – two more than the national average, with a cost to the state of $9.1 million in state overtime for each (not even counting lost productivity). That’s just a start.

America’s first Chief Justice, John Marshall, once wrote, “The power to tax involves the power to destroy.” So whom should we trust? Ronald Reagan and John Marshall, or John Burton and the California Professional Firefighters?

There is no choice. California is too great a state, with a people too hardworking and generous, to be smacked by the greedy hand of a state legislature that is out of control. AB 1690 must be stopped.

CRO columnist Carol Platt Liebau is a political analyst and commentator based in San Marino, CA.


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