Gov. Jerry Brown’s May budget revision, which he announced last week, is worse than originally projected. What once was estimated to be a $9 billion deficit has ballooned to almost twice that amount.
Thanks to the overreach of Proposition 13, California’s legislators have been powerless to raise taxes for almost 40 years. The only way the state can significantly raise taxes is through a referendum on the state ballot, which is typically subject to the reflexive hostility of voters. Brown has been barnstorming around the state, offering cuts in state programs, but demanding that California residents approve tax increases in return.
“You gotta live within your means,” he said recently on CBS. “There’s a day of reckoning.”
Brown’s proposal on the November ballot would increase the sales tax by 0.25 percent while increasing the income tax on people earning more than $1 million by 3 percent. This plan is expected to raise between
$8 billion and $10 billion annually.
If voters do not approve these taxes, Brown promises certain spending cuts will be triggered. These include cutting state health care programs for the poor by $1.2 billion and slashing welfare and child care programs by $1.3 billion.
“That’s just the way it’s gotta be,” Brown said. “The voters have to make a choice.”
The simple truth is Californians need to raise their taxes to stabilize the state’s finances and help protect much-needed government programs.
It would be remarkable if a tax increase were to be one of Brown’s legacies as governor, since the anti-tax rhetoric that has long dominated budget discussions in California originated during his last tenure as governor in the 1970s. It was then that the voters approved a series of institutional barriers to budget flexibility, including capping property taxes and requiring a two-thirds majority in the state Legislature to raise taxes, unless the voters approve tax increases in a referendum. Brown opposed the reforms of Prop. 13 before their passage, but once the voters had spoken, he piped down and helped implement their vision.
Democratic politicians have helped worsen the state’s financial problems by agreeing to onerous union contracts for state employees. Retirement and health care benefits have saddled California with massive expenses that we cannot escape. Everyone in Sacramento, on both sides of the aisle, is implicated in the state’s fiscal catastrophe.
The long-term fixes for California include freeing up how the state is allowed to spend money, revamping public pension and health care programs, and finding steady revenue sources for the state. Yet such reforms will not occur overnight. So we must all help alleviate the problem by raising taxes. Merely slashing spending will not get us out of this problem, and the time has come for us Californians to overcome our historical antipathy to tax increases, especially at a crucial time like this.
Brown is right. We must raise taxes or face the consequences that inevitably arise when we gut the last few programs available for the poor.