State GOP budget plan? More debt
By DANIEL WEINTRAUB
So now we know what kind of budget the Republicans in the California Legislature have in mind.
The most conservative Republicans in the state, the ones who occupy the state Senate, have finally shown us why they resist the Democrats’ big, permanent tax increase proposal and the governor’s smaller, temporary one. Their answer: They want the state to borrow more.
The alternative budget the Republicans proposed over Labor Day weekend does not balance. Even after including $1.6 billion in new cuts, they can’t balance the books. And they have acknowledged that the cuts required to bring the budget back into the black without raising taxes are cuts that even they would not make.
Instead, they propose taking a $2 billion advance on earnings from an expanded state lottery, borrowing from the future players, and losers, in the California lotto game.
The Republicans, to their credit, also finally listed all the spending cuts they do support. A sample:
• Eliminate eligibility for thousands of poor people in the Medi-Cal health program.
• Cut grants to families on welfare by 5 percent.
• Reduce the state’s share of responsibility for wages paid to workers who care for the elderly and disabled in their homes.
“We’ve done this in a way to defend the taxpayer and still be responsible,” Senate Minority Leader Dave Cogdill, R-Fresno, said.
But over the long term, the Republican budget is actually less fiscally responsible than either Schwarzenegger’s plan or the one backed by the Legislature’s Democratic leaders.
It might be balanced, on paper, for one year. But that would be only with the help of the borrowed money.
Schwarzenegger’s plan — relying on a temporary tax hike and $10 billion in accelerated lottery payments — also pushes the problem into the future. But it does work for at least two years longer than the Republicans’, giving the state’s economy three years to start growing again and giving the Legislature time to figure its way out of this mess. The Democrats’ plan, with permanent tax increases on high-income earners and business, would probably keep the budget balanced the longest, at least until the next economic downturn.
Still, the Republicans have done the people of California a service by releasing their own proposal. For one thing, they’ve conceded that not even they can cut their way out of this budget deficit. And they’ve shown us what the cuts they do support look like.
Now we can compare their approach to the ones advocated by the governor and the Democrats. And perhaps we can have a conversation about the kind of state government we want.
Lawmakers and the governor can continue to use borrowing and shifts and gimmicks to hobble along from one year to the next, dragging the problem behind them like a fiscal ball and chain.
Or they can be honest and raise the taxes needed to pay for the services that a large majority of the Legislature, the governor and, presumably, the people of the state desire.
Even with every cut the Republicans have proposed, spending still exceeds the state government’s revenues from the current tax structure by billions of dollars a year.
If that doesn’t make it obvious that something has to give, nothing will.
(Weintraub writes for the Sacramento Bee.)
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musikluvr wrote on Sep 8, 2008 7:17 AM:
Ruff Limblog wrote on Sep 8, 2008 8:30 AM:
~Ruff "
Skip M. wrote on Sep 8, 2008 9:23 AM:
4gnapan wrote on Sep 8, 2008 9:57 AM:
vocal-de-local wrote on Sep 8, 2008 1:18 PM:
Would a libertarian want to see the super wealthy held on a pedestal above everyone else with favors that allow them to accumulate even more wealth? I sometimes wonder if those of you who vehemently support McCain are simply middle class people just trying to make a living but are paying more than your fair share of taxes so that the super wealthy can rise even higher on their pedestal. Do you believe that income taxes should rise substantially above a certain income level? this would free up resources to lower taxes on middle income people. I still think we have to deal with dependency issues and educational bureaucracies though. In this respect I'm more of a Libertarian I think! "
freeport56 wrote on Sep 8, 2008 2:30 PM:
Should the prison guards salaries be cut to say $45k with no overtime? Should we roll back Pat Wiggins's $40K pay hike for the nurses? "
Ruff Limblog wrote on Sep 8, 2008 2:45 PM:
However, the closest thing I have seen in a long time is the APT TAX which is a fee taken on the use of the FEDERAL RESERVE electronic funds transfer system.
About 1% on each incoming transaction and 1% on each outgoing transaction instead of income, payroll, excise, sales, yadda-yadda taxes.
If you draw cash out of a bank or deposit it, the fee is 2%. If money is transfered overseas or received from overseas, fee would also be 2%.
So a person or other entity depositing $50,000 per year and spending $50,000 for a total of $100,000 in total transactions would pay $1,000 per year in user fees -- and NO TAXES.
A person or other entity depositing $500,000 and spending $500,000 would pay $10,000 in user fees -- and NO TAXES.
For $100,000,000 the fee would be $1,000,000.
This would be good for lower and middle income workers and would be a very effective tax cut for everybody.
The economy would take off like a rocket!!!
The only 'drawback' (if you want to call it that) is that the mega-rich and corporations would pay their fair share. And lord knows, they don't really want a 'FLAT TAX' !!!
Interesting to think about, eh?
And NO- neither the Republicans nor the Democrats want the rich to pay their fair share.
~Ruff "
PlasticPinkFlamingo wrote on Sep 8, 2008 5:07 PM:
I've seen the APT TAX proposal and think it would be an excellent, easy to use and administer tax plan. The only downside I can find is that there will be hundreds of thousands of IRS and tax attorneys suddenly out of a job. (pardon me while I snicker a little).
vdl- we don't put rich people on a pedestal, but we do aspire to joining them, or at least making our way through life with a lot less stress. Small government, no foreign adventures, etc. Unfortunately the Libertarian Party itself is kind of a loony bin of people who don't understand (or don't want to understand) that Personal Freedom and Social Responsibility are not pick and choose, you have to do both. Some of them think that with less government regulation they can go around and do whatever they want regardless of the cost to the environment (and various other issues I have with them). To me it's a whole package and if you can't do both sides don't do any of it. So I'm an independent libertarian. "
jwk wrote on Sep 8, 2008 10:26 PM:
Raven wrote on Sep 9, 2008 7:45 PM: