paper. But many others on this list did not and, in my opinion, it is the
most dead-on, succinct, righteous analysis of what's wrong and what's
to be done that I've ever seen on California's problems. Moreover, it's
substance, if not the particulars, applies greatly to the dynamics and
forces of our national economic chaos. Paste it on your refrigerator.
ed
http://www.latimes.com/business/la-fi-hiltzik21-2009may21,0,4354063.column?track=rss
All Smoke and Mirrors
Michael Hiltzik
Los Angeles Times: May 21, 2009
Marx Brothers fans will recall that the political philosophy of Rufus T.
Firefly in "Duck Soup" boiled down to this:
"If you think this country's bad off now, just wait 'til I get through with
it."
I've often considered that to be the secret slogan of Arnold
Schwarzenegger's administration. (Just substitute "this state" for "this
country.") After Tuesday's election, it's no longer a secret.
Schwarzenegger had the kind of voter support in 2003 that would have allowed
him to tell the voters the harsh but necessary truths about California
governance and force real reforms down their throats.
Instead, he uttered the same lies about state government and proposed the
same nostrums as many of his predecessors: Californians are overtaxed and
underserved, the budget can be balanced by cutting waste, fraud and abuse,
etc. Like everyone else who has made these claims, he never delivered on his
promise.
His cut in the car tax cost the state $3.6 billion per year, making him
directly responsible for pretty much all of today's $21-billion budget
deficit.
He hoped he could avoid reaping the whirlwind sown by these cliches.
Unfortunately, Tuesday was Harvest Day.
Let's list a few of the lies he and our other political leaders have peddled
about California's government and examine how they contributed to this
week's debacle at the ballot box.
The most onerous lie is that Californians are burdened by the highest state
taxes in the nation. The truth, according to 2006 figures derived from the
U.S. Census, is that as a percentage of all personal income, California's
tax and fee schedule ranks 18th in the country.
Then there's the canard that we unfairly soak our rich. This is supposedly a
no-no, because the rich might flee, taking with them their sterling
job-creating potential.
The dirty little secret, according to Citizens for Tax Justice, a
left-leaning nonprofit group, is that California's wealthiest residents
shoulder the lightest burden of any income group in the state. The top 1% of
California income-earners (average 2007 income: $2.3 million) paid 7.4% of
their income in various state taxes last year, counting the federal
deduction for state taxes. The highest rate was paid by the poorest
residents. Those earning $20,000 or less, with average income of $12,600,
forked over 10.2% of their earnings in sales, excise, property and other
levies.
This year's budget deal increased the disparity, raising the effective rate
on the rich to 7.8%, but that on the poor to 11.1%.
The theme of the ballot campaign was that the state's chronic budget
gridlock could be solved by more gridlock and more borrowing. All lies.
By no means does the governor deserve all the blame for the budget fiasco.
Democrats and Republicans alike have abandoned any claim to statesmanship in
Sacramento.
And what of the business community? Big corporations, entrepreneurs and
mom-and-pop stores all have a huge stake in functional state government.
Yet the state Chamber of Commerce traditionally has offered one nostrum for
California's budget ills: Cut taxes. But since it also claims to support
better education and improved infrastructure, its approach has simply
amounted to throwing the hard challenges back into the laps of a
nonfunctional political establishment.
The truth is that real solutions to the budget crisis are obvious.
One: Eliminate, or at least loosen substantially, the two-thirds legislative
requirement to pass a budget or raise taxes.
This rule has allowed a small Republican minority to hold up all budget
progress unless its reactionary program is incorporated in the deal. If the
supermajority were pared back even to 60%, the minority lawmakers would be
unable to block a budget unless they could enlist at least a few moderates
in their cause. The improvement in the tone of legislating would be
immediate.
Two: Remove legislative term limits. This ridiculous provision has reduced
the Capitol to a nursery full of would-be legislators needing afternoon
naps. Worse, it has sapped legislative leadership of its vigor.
Since mid-1995, there have been nine speakers of the Assembly. Over the
previous 20 years, there were two, including Willie Brown, the original
target of the term-limit movement. You want to tell me that government in
Sacramento has improved since then? As long as term limits exist, we'll
never have a 21st-century state government.
Three is the Big One: Revise Proposition 13. Prop 13 is often described as a
tax-cutting measure, but that scarcely does justice to the damage it has
caused.
By rendering the property tax useless as a revenue device, Prop 13 hit local
governments especially hard. Key budgeting authority devolved from cities
and counties up to Sacramento, where they have to compete with the state
government for money. You want your streets paved or more teachers for your
third grade? Stand in line behind the health department, or the corrections
department, or Caltrans.
So city streets deteriorate and local schools get worse. Police and
firefighters are laid off. All the places where the voters come into
face-to-face contact with their governments crumble.
The result? Voters get more cynical, more convinced that government is
expensive and useless. It's a vicious circle -- the more government is
unable to do the things voters want it to do, the less faith the voters have
in government and the less they're willing to spend on it. Which leaves it
with less money to do the things voters want. And on and on.
Reversing the worst effects of Proposition 13 doesn't take rocket science.
Commercial property should be subject to regular reassessment -- the "split
roll" that, inexplicably, can't gain traction in Sacramento. Cash-strapped
homeowners can be provisionally protected from the burden of higher
residential assessments -- say by allowing some assessments to be deferred
until the home is sold.
Plainly, local government needs to recover its authority to collect revenue
directly. That would help our political leadership make the case that,
considering the quality of the services and institutions state and local
government provide, Californians aren't overtaxed but undertaxed -- and the
wealthy are the most undertaxed of all.
If Tuesday's election proves anything, it's that California's political
sacred cows all need to be herded into the abattoir and dismembered, once
and for all.
Breaking the cycle that has brought us to this pass will take political
courage and real statesmanship. California's voters have been trained for
too long to think they can have roads, schools, universities, clean air and
other amenities without paying their true cost. The task of our next
generation of leaders will be to show that California is not ungovernable --
it's just been ungoverned.
Michael Hiltzik's column appears Mondays and Thursdays. Reach him at
michael.hiltzik@latimes.com, read his previous columns at
www.latimes.com/hiltzik, and follow @latimeshiltzik on Twitter.
***
From: Progressie Democrats of America
Watch Bill Moyers Journal this Friday, May 22, at 9 p.m. EDT on PBS
(check local listings)
Bill Moyers speaks with PDA Heathcare NOT Warfare co-chair Donna Smith about
how our broken system is hurting ordinary Americans. Then, policy analysts
and physicians Sidney Wolfe of Public Citizen and David Himmelstein of
Physicians for a National Health Program join Bill Moyers for a frank
discussion about the political and logistical feasibility of a single-payer
system amidst the troubled economy and a government dominated by lobbyists.
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