It seems that we are already starting to hear the "insider" crowd in Sacramento talking about a budget deal that includes more cuts combined with some sort of tax increase .  It wasn’t so long ago that we heard this same idea.  In fact, it was just last year when the Governor and the legislature concocted a plan to jam average tax payers with over $12 billion in higher income, sales and car taxes (as well as a cut in the child tax credit) in exchange for what?  Yes, there were some spending cuts — but California can’t print money (thank goodness), so cuts will happen as a function of running out of spendable cash.  The "big" reform put on the table by politicos was a very weak ballot measure that purported to be a spending cap but was proven to not be able to withstand a concerted effort by a future Governor and legislature to overspend.  And to get that weak spending reform one had to vote to extend the massive tax increases for yet another two years.  It’s also worth mentioning that in the 2009 budget was a sickening back-room side-deal where a portion of the new revenues captured by all of the broad based taxes on Californians were then directly funneled into corporate tax breaks.  Tax relief for big employers is not in and of itself a bad thing, but on the backs of taxpayers??

The February 2009 budget deal is as great example as you can find in recent history of the Capitol political establishment being completely disconnected from taxpayers and voters of California.  We all know how the story ended — with state voters rejecting the additional taxes (and the faux spending cap) by a margin of around two to one (in other words, it was old fashion butt-whooping).  It was by any measure a stinging rebuke of the deal-makers.

So now you start to hear the insiders once again talking about trying to craft some sort of proposal for the voters that would contain more cuts as well as, you guessed it, more taxes!  It really does remind me of that Bill Murray movie, Groundhog Day.  Here we go again…

Except that in this redux, the political class is showing how they are even more tone deaf than ever.  Just the results of the 2009 special election and the defeat of the taxes last year should have sent a strong message to the Governor and legislature that voters were not interested in paying higher taxes.  And why should they?  Californians are close to being the highest taxed people in the nation — let alone in the midst of a recession.  But we also can look to the results of the most recent election, where time after time, ballot measure after ballot measure, voters rejected the raising of taxes on themselves (such as rejected the car tax increase for the parks system) to the raising of taxes on business (by rejecting the CTA-sponsored measure to undo the business tax breaks in the 2009 budget deal). 

So one has to ask the obvious question, what can one actually put on the ballot that would induce a majority of voters, in current circumstances, to raise taxes on themselves?  And therein lies the pickle.  Voter distrust of Sacramento politicians is so high that I don’t know if there is ANY promise that can be made that would move them. 

And it is no wonder.  There is no admission of wrongdoing from liberal politicians that they have increased the size and scope of state government well beyond anything sustainable or appropriate.  There is no acknowledgment that perhaps there is a point at some "point of no return" was crossed where the hitting of the proverbial iceberg was inevitable.   There was no thought apparently given, as a voracious appetite for big government was satiated for decades, about what to do during bad economic times (let alone the actual negative impacts of such a large government on the health of the economy).

Now things have gotten very bad.  Desperate, even.  The state’s financial picture looks so bleak that even the conservatives who have warned of this scenario for many, many years (and were decried as being cynical, right wingers) acknowledge that a roadmap to recovery is hard to draw.

I believe that the voters will look at the politicians in Sacramento asking for them to tax themselves with the same cynical look that someone gives to an alcoholic who urgently wants, "just one more drink."

If there is to be any hope of getting a lifeline from voters in the form or some sort of temporary tax increase, it certainly won’t come from putting up spending cuts.  Voters understand those are going to happen anyways.  They know they are making deep cuts in their family budgets, so it makes sense that state government would be doing the same.  I think that there would need to be cuts and some pretty serious reforms — nothing like the pansy 1A faux cap — reforms that would be… well… beyond anything I could imagine the union-controlled Democrats putting on the table.   What could those be?  Ending the legal right of public employees to unionize?   A complete end to pensions (including current employees agreeing to move to 401k style retirement payments for future years of service)?  A voter-controlled lockbox on increasing the size and scope of social welfare spending in the future?  Substantially rolling back onerous regulations, again with a voter lockbox?  These are all extreme solutions (from the point of view of a liberal).  And all represent unfortunate clipping of the powers of the legislature going forward, which is not necessarily a good thing.  But like children who can’t behave with their toys will have them taken away, that may be how the people will look at how to deal with a legislature who continues to do all of the wrong things, even in the most dire of economic times.

In the end, even if all of these kinds of remarkable "reforms" were offered up in exchange for more tax revenues, it is quite probable that Californians will reject the offer anyways.  They likely will reject higher taxes because 1) they are already taxed enough, and can’t afford to cover family expenses, let alone state government liabilities that have come from years of unchecked, and unwise growth in state spending, 2) they are cynical enough to not believe the reforms offered, wondering whether there are loopholes, or whether activist judges will throw them out, and 3) they are more trusting in lack of revenues to actually force reforms in state spending than anything concocted by the politicians.

It is a true statement that most members of the legislature have not been there long enough to truly be tagged as the cause for this terrible situation (the incoming Governor cannot say this, as some of his actions in days of old have made today’s situation worse), but it is on them to try and solve it.  Like the alcoholic whose first step towards recovery is both admitting to themselves they have a problem, and then apologizing to all of those that they have hurt, the liberals in Sacramento should start by at least acknowledging the terrible course on which they have taken state government over a long period of time.  If they can’t be truthful now, then there is no hope of winning over California voters for any "deal" they put forward — assuming they could convince even one Republican to cross the rubicon and put a tax increase on the ballot.   And that is a big if.

This entry was posted on Wednesday, December 15th, 2010 at 12:00 am and is filed under Blog Posts.