Mr. McClintock is an expert on matters of the State budget
and fiscal discipline. He is a Senator in the California State
Legislature and ran for Controller on the Republican ticket in
2002. His valuable website is found at www.tommclintock.com
on the Car Tax Increase
by Senator Tom McClintock, Shadow Controller
Thank you for coming.
The purpose of this press conference is very simply to put the
legislature and the governor on notice that they should not expect
to see a penny from increased car taxes if they adopt AB 4X.
If the Democrats want the biggest statewide tax revolt in 24 years,
this is the quickest way to get it.
Within minutes of that measure being chaptered, the paperwork
will be filed with the Secretary of State to referend it. This
will automatically suspend the act for 90 days.
We have with us today representatives of the major grassroots
taxpayer organizations in the state, who are already pledged to
make a referendum of the car tax their top priority. I can certainly
pledge the statewide campaign structure that I have built during
my campaign for the state controller's office. And I intend to
request the formal support of the California Republican Party
It will require 373,000 signatures to qualify the referendum,
at which time the effect of the tax increase will be stayed until
the next election. At that time, the people will have the opportunity
to reject the tax increase, which I believe they will do overwhelmingly.
I also want to address the canard that somehow the state legislature
intended the current car tax rate to increase in bad economic
times. If that were the case, you wouldn't need to change the
law, would you?
Existing law has been clearly understood and practiced by the
state controller's office from the first day of its enactment.
There are only two circumstances that would trigger an increase
in the car tax under existing law.
The first is gross incompetence by the Controller in failing to
maintain sufficient funds in the treasury to cover the anticipated
obligations of the state. The other is if the state was closed
out of the capital market.
Neither of these events has ever occurred in the history of California.
The Democrats want to fundamentally change this law in a manner
that would automatically triple the car tax.
Last week, local government officials said they "already"
were reducing police and fire protection. That's not because of
the car tax.
In fact, local governments have never lost even a penny of revenue
in the five years since the car tax was first reduced. It would
take a majority of the legislature to do so, and before the local
government horror stories are given any credence, I challenge
them to name even one legislator who supports such a measure.
And there's a reason for that. There is no excuse for the state
raiding local government funds at a time when it is already spending
a higher percentage of people's earnings than ever in its history.
As the Sacramento Bee pointed out yesterday, California's CURRENT
car tax is higher than the next five largest states in the country,
and in fact is twice as high as the next runner-up.
The $4 billion of tax increases proposed by the Democrats is about
what the Governor has allowed his bureaucracies to overspendbeyond
the approved budgeteven knowing the condition of the state's
Indeed, the legislature's Democrats have already rejected billions
of dollars in actual program reductions that the Governor proposed
in December. So to the inevitable question, "What do you
substitute for the tax increase?" let's start with the program
reductions that the Governor has already proposed.
An overall reduction in the neighborhood of 9.5 percent of state
spending, held constant for 18 months, would completely address
the budget deficit without raids on local governments, pilfering
of pension funds, tax increases, or accounting gimmicks.
So those who vote for this bill should be on notice not to expect
a penny from this tax. The filing and qualification of the referendum
will stay the effect of this bill until the people of California
have the opportunity to soundly repudiate it. And then they will
have the opportunity to repudiate the politicians who sought to
triple their car taxes.