For a decade, California state government has spent more than it receives in revenue. The result? Our state has the lowest credit rating of all 50 states, we rank in the top four in unemployment, near the top in tax burden per capita, and we rank last or close to last in a number of surveys that measure business climate. Not coincidentally, California small business bankruptcies are up 81% over last year.
For lawmakers, spending is a compulsion. During the historic recall campaign of 2003, Arnold Schwarzenegger, who correctly labeled the spending problem as an addiction, promised he would be the antidote. His pledge to “blow up the boxes” and bring fiscal sanity to Sacramento led voters to support his candidacy by a huge margin.
Sadly, and perhaps predictably, the spending terminator quickly succumbed to a more regional strain of the Beltway fog – some have even likened it to the Stockholm Syndrome where, after just a few months in office, elected officials become more aligned with the tax receivers than the tax payers.
With California now facing another $20 billion dollar deficit, it is time to impose on California politicians the equivalent of the twelve-step program pioneered by Alcoholics Anonymous, to curb their addiction, compulsion and behavior problems.
But being long time taxpayer advocates, let us be a bit more efficient by proposing a slightly simpler six-step program.
1. A key element of either a 6- or 12-step program is admitting that one cannot control one’s addiction or compulsion, so the answer is a spending limit with teeth. Lawmakers must be limited to spending no more than the state takes in, no ifs, ands or buts.
2. A growing percentage of the general fund is the repayment of debt. With more debt being piled on – in the form of general obligation bonds, other debt instruments and pension obligations – the state must begin to do that which it rarely does: prioritize this debt. Tough decisions must be made about what we really need as opposed to what we may want. Proven infrastructure projects, devoid of fluff, might pass the test. Other projects should be delayed, if not terminated outright.
3. To further curtail any tendency to relapse into mischief, the amount of time spent lawmaking should be reduced. The California Legislature should be reorganized around the more successful model of Texas, where lawmakers meet no more than 140 day every other year and are paid $7,500 annually.
4. To remove from legislators the temptation provided by public employee union enablers – who are responsible for the election of the majority of lawmakers – the state work force should be slashed by 15%. This will reduce not only their political influence, but since California state employees are the highest paid in all 50 states, relieve some of the pressure for extravagant spending.
5. To reduce the pressure to spend, spend, spend (especially on public employee salaries and benefits), new rules should be adopted to reduce the corrupting influence of the tax receivers on our political institutions. Allowing government employees to opt out of unions and paycheck protection laws would go far in leveling the political playing field.
6. And finally, to make amends to those they have harmed, as directed in the 12-step program, taxes should be cut so that the per capita tax burden is reduced to no more than the national average. This would put more money in the pockets of struggling taxpayers and give a boost to the state economy as businesses that provide jobs again look to our state as a good place to relocate or expand.
As California enters 2010 with a budget deficit of over $20 billion, nothing but radical reforms which preserve liberty, reward innovation in the private sector and which lessen the influence of those living off taxpayer dollars can save the Golden State. The only question is whether we have the strength and wisdom to take the first steps to recovery. CRO
copyright 2010 Howard Jarvis Taxpayers Association
Jon Coupal is an attorney and president of the Howard Jarvis Taxpayers Association — California’s largest taxpayer organization with offices in Los Angeles and Sacramento.