The Budget: January 2008 Archives

I'd like to bring everyone's attention to a column in Wednesday's LA Times: We can't afford Proposition 13 anymore. Excerpt:

... I know I'm asking for it by even suggesting that Proposition 13 is doing more harm than good. But this topic resurfaces from time to time, and this should be one of those times.

Schwarzenegger is expected to declare a state of fiscal emergency this week to deal with the budget mess. He proposed a constitutional amendment in Tuesday's State of the State address to give him more power over California's finances.

It's pretty simple, though. Either we spend less money or we raise revenue, or both.

I'll be the first to say that Prop 13 did a good deed by helping elderly people stay in their homes. A fixed-income retired person should not face ever-higher tax payments because the houses in the neighborhood are rising in value. Any changes to address the problems created by Prop 13 must take this into account.

But there is no justification for the present situation where people buying a new house can pay as much as ten times what long-time residents next door are paying. And certainly commercial real estate - shopping centers, hotels, office buildings, etc. - should not get a huge tax break! The reason that our legal system grants limited liability and other benefits to businesses is because businesses are supposed to serve the public good. Paying taxes that help us build the roads that transport the products that businesses sell and building schools that educate the employees are part of that public good.

As we address this budget "emergency" I think the very first thing the state should look at is fixing the tax system, recalling Prop 13, closing loopholes, increasing taxes on profitable corporations, taxing oil companies as they pump our oil out of the ground, restoring the vehicle license fee and imposing a surcharge on the wealthiest.

There is more on this over at Calitics where Robert in Monterey write,

As the post-mortems continue to characterize the year just past and prognosticators speculate on what will be the year to come, it is clear that California is in for a bumpy ride over the next several months, if not years. With a projected $14 Billion short-fall (with many estimating the number may reach much higher), there is no question that the times call for some courageous leadership. But in today's political world, where cynics and superficial pundits abound, it is difficult for real leadership to emerge and be given the space to articulate and implement that necessary vision, courage and know-how to make the necessary changes we desperately seek and need.

Commentators proclaim that little was accomplished in the year past---no major health care reform, no real water policy emerged to deal with our state's chronic but moving toward acute problem, little real movement to develop a massive but necessary investment in transportation infrastructure, including our roads, bridges, ports or public transit, sewer systems, schools, etc. The bottom line is: we haven't seriously or effectively addressed these needs. Our massive prison system is crumbling under its own weight, while federal judges determine whether we are complying with basic legal and human rights while we warehouse more and more people and spend greater and more scarce resources in doing so.

There are many who study our state's political institutions and systems and declare the state ungovernable, observing that we are too dependent on special interests who fund campaigns; suffer from public initiatives generated from out-of-state business or ideological interests who are using our state as a guinea-pig; a tax system that is arcane and heavily-weighted in one direction or another. Also factored in is simply the massiveness of our state, with one out of every eight Americans living within our borders. So where is the leadership to deal with all this?