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
By Tom McClintock 7/9/03
Illegal taxes are what political revolutions are made of. Just
ask King John, whose illegal taxes produced a taxpayer revolt
that ended with the Magna Carta. Or George III whose illegal
taxes provoked the American Revolution. California’s Royal
Governor could profit from their example.
Governor Davis’ action to triple the car tax is brazenly
illegal. According to the Legislative Counsel’s Office
(the official legal office of the state legislature) only the
Controller can raise the car tax, and only then on a month-by-month
basis, and only then if the state cannot write a check to reimburse
local governments for lost revenues, and only then for the amount
of the shortfall.
Not one of these conditions has been met in the Governor’s
decree. He has simply ordered the theft of $4.2 billion of taxpayer
money that he has no legal authority to collect. King John would
How can that happen
in a nation of laws? California’s
constitution prevents a court from issuing an injunction to block
an illegal tax – meaning it will take several years before
the courts can stop him. In 1990 the state imposed a $300 tax
on every car brought into California in direct violation of both
the state and federal constitutions. It took ten years before
the courts could order a refund.
Of course, when that
happens with the car tax, Californians will be due all of their
money back, plus interest. If legislators
go along with the charade and pass a budget based on this illegal
tax, they will be setting themselves up for billions of dollars
of refunds that are certain to break any future budget. But by
then, Davis expects to have gotten out of town and left the whole
mess in somebody else’s lap.
Until then, Californians face two choices. One is to recall
Davis, which could occur as early as this fall. If Davis can
claim the authority to raise the car tax by fiat, the next governor
can claim the same authority to lower it by fiat.
The other is to place
an initiative on the ballot to abolish California’s car tax once and for all. I have filed two
initiatives to do so – one of which abolishes the tax completely,
prevents the imposition of future taxes, and fully reimburses
local governments for any losses.
Is such an action responsible with the state facing the biggest
fiscal crisis in its history? First and foremost, the state is
not entitled to increase this tax. Period. When the initiative
takes effect in November of 2004, it will still take taxpayers
nearly three years just to be made whole for the taxes the state
has illegally taken from them in the intervening time.
But more to the point,
California is not suffering a revenue shortfall. In the first
four years of this administration, revenues
have increased 25 percent while inflation and population combined
have grown only 21 percent. The problem is that spending has
increased 40 percent. Tax increases – even legal ones – cannot
bail out a state that is increasing its spending almost twice
as fast as its revenues. The Reason Foundation has identified
$6 billion in wasteful bureaucracies that could be eliminated
or consolidated, and another $9 billion in savings from contracting
out -- $15 billion that could be cut out of the budget without
affecting vital services. But such reforms are anathema to California’s
powerful spending lobby, and none of them has been adopted.
When the federal government finally got serious about shutting
down obsolete military bases, it conducted a comprehensive
review and closed 90 of them, saving $20 billion -- and the
military was stronger for it. For six years, I have proposed
the same review mechanism for California’s obsolete and
inefficient bureaucracies – and last month that reform
was killed on a party line vote for the sixth year in a row.
Jefferson once said that a little revolution every now and
then is a healthy thing to prevent despotism from taking root
-- as the Royal Governor of California is about to discover.