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opinion inside CaliforniaRepublic.org
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RECALL
FOLLIES
California
Learning
Recall has its first victory.
NEW
TODAY [Michael J. New] 8/22/03 | Fiscal
conservatives won a quiet victory last week when California enacted a budget
that did not include a major tax increase. Plagued by an immense $38 billion
shortfall, the summer months produced much in the way of acrimony and little
hope for a resolution. As a result, many were surprised when the assembly passed
a $100 million
budget, which Governor Davis promptly signed into law on Saturday. | Now,
this budget is far from perfect. It triples the vehicle-license fee and hikes
other fees. Furthermore, the budget is dependent on one-time borrowing and will
likely result in another budgetary shortfall next summer. Still, the fact that
the impasse was resolved without a large tax hike exceeded the expectations of
all but the most optimistic
of observers. | So
how was California able to escape from its $38 billion deficit without a substantial
tax increase? Several reasons. One, assembly Republicans demonstrated remarkable
solidarity in their opposition to tax increases. Senate Minority Leader Jim Brulte
even
threatened to campaign against any Republican who voted to raise taxes. | Two,
California's supermajority requirement played an important role. In California,
Democrats possess majorities in both chambers of the state legislature. As a
result, the opposition of Republicans would have meant little if only a majority
was necessary for a tax increase. However, California's supermajority requirement — enacted
in conjunction with Proposition 13 — gave assembly Republicans the ability
to block tax increases and obtain concessions from Democrats. [more
inside CaliforniaRepublic.org]
RECALL
FOLLIES
Dear
Tom McClintock Supporter ...
Arnold may not be ideal, but first you have to win.
[Hugh Hewitt] 8/21/03 | Dear
Tom
McClintock supporter, | Thank
you for listening to my show. I appreciate it. I have built my California success
on your support, and whenever I take a call from San Diego or Los Angeles, the
Inland Empire or Sacramento, San Francisco or Fresno or anywhere else in the
Golden State, I know that if it is a conservative, it will be a passionate but
informed conversation. | You
may recall I endorsed Tom in the election of 2002 and had him on the program.
You may also recall I had Bill Simon on the program many, many times as well,
and endorsed him before the primary election in March of 2002. I told you then
that I was supporting Bill over Dick Riordan because Bill had a better chance
of beating Gray Davis. | I
still believe that, and had Dick Riordan gotten into the recall race instead
of Arnold, I suspect I would have ended up supporting Bill or Tom for the same
reasons I plugged Bill in March of last year: I vote for the most conservative
candidate with a reasonable chance of winning. | Throughout
the summer and fall of 2002, I lectured moderate and liberal Republicans and
independents in California, and across the country, to put aside differences
with candidates they thought too conservative and support the GOP nominees. Sometimes
that meant supporting conservatives like Simon, or U.S. Senate candidates like
John Thune, Norm Coleman or Jim Talent. | My
point always was – and remains – that the Republican Party is the
party of national security and national prosperity, and that the Democratic Party
has become a captive of narrow and greedy special interests camouflaged behind
class-warfare rhetoric. | You
can't always get a moderate nominee, I told these centrist voters, but they needed
to clearly think through which party was better positioned to govern well – and
vote accordingly. | Now,
a center-right Republican, Arnold Schwarzenegger, is campaigning for the governorship
in California, and many of you have declared for Tom McClintock no matter how
unlikely his victory becomes. You already know he cannot win, and his poll numbers
and fund-raising receipts show this. [more
inside CaliforniaRepublic.org]
RECALL
FOLLIES
The
Purpose of a Great Party
McClintock is true to conservative principles
[Joe Armendariz] 8/21/03 | Abraham
Lincoln said the purpose of a great Party isn't to defeat the other Party,
the purpose of a great Party, according to the Great Emancipator, was
to provide superior leadership. Lincoln went on to suggest that the way
to serve your Party best, is to serve your country first. | With
all due respect to each and every one of the prospective candidates lining
up to serve this great state as its next Governor, one individual stands
out from the rest and has proven himself to be a great leader. First
elected to the State Assembly at the age of 26, within two years Tom
McClintock was serving our Party in a leadership position. And what a
leader he has been. | They
say you can't hold a good man down and that cream rises to the top, so
it is with Senator McClintock. He is a man utterly incapable of compromising
his principles or acquiescing to political expediency. When one considers
the fiscal crisis California finds itself in, it is impossible to imagine
a more suitable remedy then to elevate McClintock to the office of Governor. | Common
sense says that when you have a medical problem, you consult a doctor.
When you have a legal dispute, get a lawyer. If you spot an intruder
entering your property, call the police. When your state is mired in
fiscal chaos, due to out-of-control spending and excessive regulation,
who better to call then the only man in California who consistently projected
correctly the magnitude of the crises of the 1990s and was consistently
among the most accurate forecasters of the effects of state tax and spending
policies? | Senator
McClintock is that individual and Senator McClintock is exactly what
California needs. [more
inside CaliforniaRepublic.org]
FABULOUS
BUDGET
California
Gives Junk Bonds a Bad Name
[Joe Armendariz] 8/18/03 | If
California were a business, there would be nothing left except finger-pointing.
Unlike a capital -starved new company with an exciting innovation or novel
product, California is a bureaucratic monstrosity with dwindling market
share and an incompetent management team. | Even
after the"compromise" hammered out this summer, California's
budget remains structurally out of balance for the next several years,
while current and future spending is being financed with illegitimate
taxes and illegal borrowing. California taxpayers have little to celebrate
as
a result of the
compromise. | The
decision to enter the budget compromise marks a significant victory insofar as
the spend-happy legislature was prevented from raising taxes yet again. But in
fact, the 16 Republicans in the Legislature who voted for this structured settlement
have, in a sense, embraced the worst of both worlds. Not only have they agreed
to rob Peter in order to pay Paul -- they have the audacity to ask Paul to lend
them the money to repay Peter. [more
inside CaliforniaRepublic.org]
SHEERING
THE TIMES
Scheering
Prop 13
The
rich get richer and some avoid taxes
[Stefan Sharkansky] 8/20/03 (Editor's
Note: Stefan Sharkansky provides a valuable ongoing service
deconstructing
LA Times "columnist" Robert Scheer.) | In this
week's column, Robert Scheer takes on California's Proposition
13, the 1978 ballot measure which strictly limits property
tax increases. Headline: A higher tax on all your houses.
A more honest headline might be "A higher tax on all my houses",
because Robert Scheer and his wife own at least three houses,
while most of the rest of us own at most one house. Prop. 13
is in the news again, because Warren Buffett, in his role as
Arnold Schwarzenegger's economic advisor suggested last week
that California's property taxes are too
low. | There
are legitimate criticisms of Prop. 13. As a recently former
California homeowner, I agree with those who say that Prop.
13 gives the state a silly property tax structure. Not so much
for the aggregate amount of tax revenue collected, but for
the way the burden is unevenly distributed. Because property
values are reassessed to market value only at the time of a
sale, there is an enormous advantage to long-term owners at
the expense of those who enter or re-enter the market. It is
precisely a form of rent control with the same undesirable
side effects. Do you want to give young entrepreneurs with
growing families a reason to leave California to start their
businesses elsewhere? Prop. 13 is the solution for you! [more
inside CaliforniaRepublic.org]
WEST
BANK OF THE SEINE
Talk
About Déjà Vu!
Special interests have brought back the economic problems of the early
90's
[Ray Haynes] 8/19/03 | When
I joined the Legislature in 1992, California was facing two major crises—our
business environment was falling apart and our budget was seriously out
of balance. Businesses were leaving the state in droves, complaining that
worker’s compensation premiums were doubling and tripling, and
that the regulatory environment was stifling the establishment and expansion
of business in California. Other states were poaching our employers,
and
they were taking their jobs with them. State revenues were falling through
the floor. | Governor
Wilson had just tried to solve the budget crisis by raising taxes, and
instead saw his revenues collapse. For the first time since 1952, California
had just seen a year-over-year decrease in revenue. State spending exceeded
state revenue by 15%. My first day in office I had local business owners
complaining about how they had to lay off employees, and government employees
asking me to raise taxes so they could keep their jobs. The Commission
on California’s Competitiveness had just come out with a long report
detailing how the government regulatory environment interfered with job
creation. Things got so bad that even then-Speaker Willie Brown felt
compelled to convene an economic summit, inviting business and labor
leaders to discuss
solutions to the problems. | Governor
Wilson got to work. He immediately began to work on the worker’s
compensation issue and other regulatory issues to make it easier for business
to create jobs in California. By the end of 1993, the Legislature had reformed
worker’s compensation, passed a number of regulatory relief bills,
held the line on tax increases, and changed a lot of people’s attitudes
about California’s approach to business development. By the end of
1994, the early 90’s California recession was over, businesses were
creating thousands of new jobs, and California’s revenue was increasing
so much that by 1995, and for four years thereafter, California was able
to cut tax rates, and
still experience huge surpluses. [more
inside CaliforniaRepublic.org]
THE
MONDAY COLUMN
Trumping
the Race Card
Republicans Can’t Let Democrats Win the “Race” to
the Bottom
[Carol Platt Liebau] 8/18/03 | The
most recent Field poll purporting to show support for Lieutenant Governor
Cruz Bustamante running three points ahead of Arnold Schwarzenegger in
the governor’s race – and the media’s breathless reporting
of it –calls vividly to mind the well-known quotation by author
O. Henry: “A straw vote only shows
which way the hot air blows.” | The
poll, crippled by a small sample and at odds with other reliable measures of
public support, is most likely wrong. But its significance lies less in its inaccuracy
than in its implications for the upcoming recall election. The Field poll has
probably put the last nail in the coffin of Governor Gray Davis’ political
career. The increased public support for Cruz Bustamante will convince California
Democrats that they have a better chance of helping him reach a 42% plurality
(the probable threshold for victory) than persuading 51% of voters to retain
the governor. Accordingly, Davis will be left for (politically) dead -- the focus
will shift from the recall itself to the campaign for a new governor. | But
for Democrats, here’s the rub: Bustamante is by no means a dream candidate.
Indeed, he bears an unfortunate resemblance to the cartoon character “Wimpy” of “Popeye” fame – the
mild-mannered man who continually promises, “I would gladly pay you Tuesday
for a hamburger today” (a phrase, incidentally, that seems to sum up Bustamante’s
economic philosophy, or at least what we know of it). And the lieutenant governor’s
political career has been strikingly nondescript, except for two damaging episodes:
his inadvertent use of a racial slur while addressing the Coalition of Black
Trade Unionists in February of 2001, and his widely-reported attempt to slip
out the back door of his office to avoid dealing with a contentious budget issue
when he was serving
as Assembly Speaker. | Given
their candidate’s deficiencies, it’s unlikely that Democrats will
see many more polls showing Bustamante in the lead once Californians have become
better acquainted with him. And when Arnold Schwarzenegger begins to pull ahead
consistently in the polls, Democrats will confront the reality that their best
chance of winning rests on their ability to turn out a large Latino vote against
the Republican frontrunner. As Democratic desperation grows, it will be readily
identifiable through one clear measure – the frequency and ferocity of
Democratic attempts to play the “race card.” [more
inside CaliforniaRepublic.org]
FABULOUS
BUDGET
Q&A:
What Taxpayers Need to Know About the State
Budget
[Jon Coupal] 8/16/03 | Q.
What period of time does this budget cover? | A.
Currently, California has an annual budget which runs from July 1st
to June 30th of the following year. This is why they call it the "fiscal
year" instead of a normal calendar year. The $99.1 billion budget
which was just approved was for the 2003-2004 fiscal year. Because
of the close relationship between the state and local governments,
the latter
generally operate on the same calendar. | The
budget was approved several weeks late this year, but given the chasm
between the two parties, it could have been much worse. Additional pressure
was placed on lawmakers to resolve the budget impasse when, as a result
of a suit filed by the Howard Jarvis Taxpayers Association, the California
Supreme Court ruled the state lacks legal authority to spend money --
with a few minor exceptions --after June 30th without a budget.| Q.
How come there is no consistency is describing the size of the deficit? | A.
Various figures have been used to describe the size of the deficit, ranging
from $26 billion to over $38 billion. The problem is that the size of
the deficit depends on state revenue projections and other assumptions
about future events. There are two major problems with California's financial
situation. First, on a day-to-day basis, government is spending more
money than it is taking in. Second, we have a massive amount of accumulated
debt. | Think
of it this way: Suppose your weekly take home pay is $1,000 a week but
you are spending (with a little help from Visa or MasterCard) $1,200
a week. That means every week you fall further into debt. Then suppose
that, unlike politicians, you begin to act responsibly and reduce your
spending to the $1,000 per week that you are taking in. That's a great
start as you are now operating on a balanced budget. However, there is
one remaining problem: You must now repay your debt. | California
is the same way. Whatever the politicians tell you, we are still spending
more money than we are taking in and our children will be saddled with
billions of dollars in debt. [more
inside CaliforniaRepublic.org]
MISEDUCATION
Remember
the Big Picture on California Education
It's the standards...
[Lance T. Izumi] 8/16/03 | On
August 15, California's education officials are scheduled to release
student scores on the 2003 state standardized tests. While the results
are an important indicator of student and school performance, there
are other criteria that shouldn't be forgotten. A comprehensive overview
of all key indicators is contained in the California Education Report
Card: Index of Leading Education Indicators, Third Edition, recently
released by the Pacific Research Institute. | In
2002, California students as a whole did not perform well. For instance,
on the California Standards Test, which is the main measure used
to rank school performance, only about a third of students scored
at or above the proficient level in English/language arts and math.
It is likely that student scores on the 2003 test will increase somewhat,
which is certainly a good thing. However, not only will a significant
majority of students still be performing below a proficient level,
other yardsticks of education performance continue to tell a discouraging
story. [more inside
CaliforniaRepublic.org]
