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

Shadow Governor
A Mount Vesuvius of Misinformation
by Senator Tom McClintock
3/9/03

California’s spending lobby has recently erupted into a veritable Mount Vesuvius of misinformation over the state’s car tax. It amounts essentially to this: unless the car tax is immediately tripled, police and fire protection will be decimated.

Come now.

In the five years since the car tax was reduced, local governments have not lost a penny of funding and they won’t in the future. It would take a vote of the legislature to approve such a reduction and both houses have already unanimously rejected the idea outright.

The next time an official says, “local police and fire protection will be devastated unless the car tax is tripled,” ask them to name even one legislator who has pledged to eliminate local assistance. Just one. There aren’t any. And it would take at least 63 legislators in both houses to change the law to do so.

But isn’t the tax supposed to increase in tough economic times? No. The wording of the law is quite clear and has been consistently administered for nearly five years. The car tax can only increase if there are insufficient funds in the state’s operating account to meet its monthly obligations – that is, if the controller is incompetent and fails to maintain a cash balance in the state’s checking account or if he is unable to arrange the necessary financing. Neither event has ever occurred in the history of California.

What do public officials really mean when they say, “If we don’t raise taxes, police and fire protection will be devastated?” They mean that police and fire protection are their lowest priorities and the very first things they will cut in a pinch. I worry about such people in positions of authority.

Last week the Senate Republican caucus offered an alternative plan that would balance the budget within two years without raising taxes. There is no excuse for tax increases at a time when state government is already spending a larger portion of your earnings than ever before -- and delivering less.

Even after California’s car tax was reduced to its current level, it is still the highest tax of the five largest states in the country, and indeed is twice as high as the next runner-up, Illinois. It is a tax on a necessity of life and not a penny is dedicated for highway construction.

There’s one more reason to be skeptical that raising the car tax will curb the state’s spending binge. It was recently revealed that Gov. Davis, knowing the dire financial condition of the state, has allowed his bureaucracies to spend $4.1 billion above and beyond the budget approved by the legislature last September (which was itself too big to be sustained by California’s economy). The proposed car tax hike won’t even cover the unauthorized spending Davis has permitted in the past six months.

Over the last four years, even while the recession was suppressing tax receipts and the car tax was being trimmed, state revenues have still increased a healthy 25 percent while inflation and population combined have grown only 21 percent. This is not a revenue problem. The problem is that spending in the same period has ballooned 40 percent.

And that’s not the fault of taxpayers for not paying enough taxes.