Over the last months of budget negotiations, there has not been evidence of a proposal forwarded by a state legislator of either party that reduces spending by the $40 billion necessary to balance the budget without a sizable tax increase. If that proposal exists, it has not benefited from sufficiently wide support from that legislator’s colleagues to become part of the budget debate.

Because of a lack of an alternative that balances the budget solely through spending cuts, it’s been apparent for some time that the final budget agreement will ultimately involve a considerable amount of additional taxes. That’s not a good thing, but it’s a thing. So at this point, Republicans have two options: either continue the stalemate indefinitely or propose that alternate budget. The lack of a state government holds great ideological appeal, but creates practical difficulties. So the question is: where is that alternative budget and the plan for building public and political support for it?

The budget before the Legislature is no cause for celebration. It’s unlikely that the Republican leaders who have been part of the negotiations –… Read More

This just off the transom…

California Assemblyman Chuck DeVore Resigns Leadership Post Due to $14 Billion Tax Increase Deal

Feb. 14, 2009, Sacramento, CA – California State Assemblyman Chuck DeVore resigned today as Chief Republican Whip due to his opposition to a massive tax increase deal brokered by Republican legislative leaders. DeVore said, “The St. Valentine’s Day deal to raise taxes on hardworking Californians will neither close the budget deficit nor control spending. I believe leadership thinks they are doing the right thing – but I cannot be a party to this agreement as I believe it will harm California.”

Excerpts of DeVore’s letter to Assembly Republican Leader Mike Villines follow:

“…the recent agreement you negotiated to increase taxes in exchange for a spending limit will not likely accomplish the twin aims of deficit reduction and budget control that you seek.

“This proposed agreement also strikes at the heart… Read More

OK, it’s getting hard to format what is nowa back-and-forth between Pacific Research Institute Economist Dr. Benjamin Zycher and Mike Genest, the California Director of Finance. In a nutshell, they are going back and forth over the language of the potential spending cap that is in the Big-5 Big-Tax deal. So, below you have in RED summaries of Zycher’s observations as penned by Genest (you can see all of Zycher’s original observations here). Then in GREEN are Genest’s responses. Now, in BLUE are Zycher’s responses to Genest.

I HAVE FAITH IN ENTERPRISE LEGISLATIVE STAFF MEMBERS TO MAKE SURE THIS IMPORTANT EXCHANGE GETS TO THEIR BOSSES DOWN IN CAUCUS… :-)

Oh yes – this is a great opportunity to make a further editorial comment about how this process is being rushed way too quickly. Heck, we can’t even get policy experts to agree on what should be very objective issues. Isn’t it time give this a few more days and let all of these questions be answered in a less harried environment?… Read More

The debate has begun on the Assembly Floor.

You can watch it live here.

Here’s a screen shot of my Assemblyman, Chuck DeVore. Undoubtedly saying something very conservative!… Read More

Ever seen sausage being made. Here are some summary documents being distributed to the press of the Big 5 Big Tax deal. There are a lot of interesting items in there. You can be your own judge of whether the "concessions" given up by the Dems are worth the $14.8 billion in new taxes being "given up" by Republicans.

The documents are linked below (h/t to the Sacramento Bee website).

I should note that these are the first written documents detailing this budget deal that I’ve been able to get my hands on.… Read More

Some folks are getting paid to provide some good coverage of the legislative session goings-on.

KQED Public Radio’s John Myers is twittering here. There are also updates from the Sacramento Bee’s Capitol Alert blog.

You’ll know pretty quick if, in fact, Republican legislators facilitate $14++ billion in new taxes on Californians.… Read More

From John Fund of the Wall Street Journal:

I feel like I am watching a split screen – and both are depicting horror movies in public policy. As I write, one screen shows our lawmakers in Congress rushing a gigantic spending bill through so quickly that Democratic Senator Frank Lautenberg admitted that none of his colleagues would be able to read a final version before they vote on it. Lobbyists with goodies in the bill had copies of the bill yesterday, even before lawmakers did. The second screen I am watching is one focused on my home state of California. There “Five Men In A Room,” the state’s… Read More

Apologists for the massive $14 billion tax increase being advanced as a solution to the chronic state deficit like to point to 1991 as validation of this strategy.

Then, as now, California was in the depths of recession. Then, as now, the confronted a historically huge budget deficit — which at the time was $14 billion.

At the end of the day, Gov. Pete Wilson struck a deal with the Democratic majority to erase the deficit with $7 billion in tax hikes and $7 billion spending cuts, and succeeding in toppling Assembly GOP Leader Ross Johnson and pealing off the necessary 7 Republicans to vote for the deal.

Conventional wisdom, viewing that deal through the gauzy mists of time, hails it as a grand compromise of statesmanlike proportion that restored health to the budget, and as a model that we should emulate today.

Too bad it’s a myth, because inflicting a massive tax increase on a weak economy had the opposite effect, and the next year the state was faced with a $3 billion deficit.

Former Sen. Ray Haynes laid out the truth of what transpired in this 2005… Read More