Tom McClintock

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

The Shadow Controller
So Go Ahead. Make My Day.
by Senator Tom McClintock
2/3/03/03

This measure was approved by the California Senate by a vote of 23 - 16.

With this action, you will ignite the biggest tax revolt that California has seen since Proposition 13.
So be it.

But before you do, I want to address the sophistries that form the foundation of this measure, so at least the record is clear.

The first we just heard is the notion that the legislature intended that the tax go up in bad economic times, and this bill therefore doesn't change existing law. Well, if existing law really did that, you wouldn't need this bill, would you?

The truth is that if this provision had been part of the original law, the car tax reductions could never have taken place even in the good times.

The provision they cite has been clearly understood and practiced by the state controller's office for the five years since that legislation was adopted.

Under that provision, there are only two circumstances that would trigger an increase. The first is gross incompetence by the Controller in failing to maintain sufficient funds to cover the anticipated obligations of the state. The other is if the state were closed out of the capital market. In the entire history of California, neither of these events has ever occurred.

This measure fundamentally changes existing law.

It redefines the general fund - in an unprecedented manner -- to remove from the calculation of fund balance any outstanding loans.

Even in good times, short-term loans are routinely made to the general fund - from both internal and external sources -- to even out the state's cash flow. That's what keeps the money in the general fund all year long to pay the state's obligations while revenues fluctuate month-to-month.

By deducting any outstanding loans from the general fund's condition, you have just guaranteed that the car tax will be tripled - even in good times -- because this is the condition of the general fund throughout much of the year - even in the good times.

So let there be no confusion: the effect of this measure is to automatically and permanently triple the car tax.

The second sophistry is that local governments will suffer without this bill. The truth is that in the five years since the car tax was reduced, local governments have not lost a penny of support. Indeed, the ONLY way local government support can be cut is by a vote of this legislature. And the budget committees of both houses have unanimously rejected any proposal to raid local government funds.

The third sophistry is that this measure only requires a majority vote. The Constitution is not ambiguous on this point: "any changes in state taxes enacted for the purpose of increasing revenues... whether by increased rates or changes in methods of computation must be imposed by an Act passed by not less than two thirds of all members elected to each of the two houses of the legislature."

So you are deliberately enacting an illegal tax by majority vote in direct and flagrant violation of the state constitution. So much for the rule of law.

The state's problems are not a shortage of revenue. AFTER the car tax was reduced and AFTER the dot-com collapse, and AFTER the state's revenues plunged, we're still taking in 28 percent more revenue than four years ago while the population and inflation combined have grown only 21 percent.

And AFTER the car tax was reduced, it is still the highest among the five largest states, and indeed is twice as high as the next runner-up.

You want to start a tax revolt? You're on. In the last three days, three thousand volunteers have logged on to my website and pledged 200,000 signatures toward a ballot measure - and that's just the result of a few radio interviews. If this response continues, I believe we'll have enough signatures to abolish the entire tax outright - which is what we should have done five years ago. And that's just the beginning of the tax revolt you are starting today.

So go ahead. Make my day.