Dear Governor Brown: About That Budget...

Wednesday, June 20, 2012

Page 6

IN MY OPINION (Column)

Dear Governor Brown: About That Budget...

By JON COUPAL

Dear Governor Brown,

California taxpayers are tired of being misled and desperately want to hear the truth about the state budget. In 2010, voters gave you and the legislative majority control of the process by passing Proposition 25 because they thought this would—at long last—ensure the delivery of an on-time balanced budget devoid of gimmicks. It did not. Last year’s budget assumed $4 billion dollars in wholly fictitious revenue and over the last six months our deficit has increased from $9 billion to $16 billion.

On Friday, legislators sent to you the latest spending plan that was, once again, billions of dollars short of a balanced budget. Why? Because legislators knew that as long as they sent you a “budget”—no matter how unbalanced—they would still get their paychecks. This is an insult to the intelligence of California voters.

Sadly, this isn’t the only affront to fiscal responsibility. Both you and the majority Democrats have again made revenue assumptions that would shock the average California family. Are average citizens aware that you assume over $2.5 billion in revenue from the less than stellar Facebook IPO and cap-and-trade auction scheme? Are they aware that you increased spending in your budget by 6% from a year ago?

The days of keeping Californians in the dark are coming to an end. You should seize the opportunity to answer honestly these and other budget questions.

As the media and California voters are beginning to understand, the biggest casualty on Friday was transparency. Was this budget in print for 72 hours before it was sent to you? Why weren’t all budget related bills sent to you by the June 15th constitutional deadline?

You have no agreement with your own party on billions of welfare and state worker salary reductions. Why should voters trust that their tax dollars will be spent more wisely in the future?

Over $350 million from a recent national mortgage settlement was diverted into the General Fund instead of helping homeowners. Is California’s dramatic foreclosure crisis a concern to you? Hundreds of millions more was diverted from a special fund to pay for construction and repair of courthouses. Disregarding fund shifts like these and various backfilling proposals and deferrals and the true amount of genuine cuts is slightly over a billion dollars, not eight billion as you claim.

Your budget also includes $9 billion in income taxes and sales tax hikes. But didn’t voters reject these same taxes by a two to one margin in 2009? Our structural budget deficit has actually increased since then. Why do you believe this November’s outcome will be any different?

You claim that the revenue from your tax increase will fund education, but objective observers note that the new tax revenue could be easily diverted. Are you prepared to deal with these critics, including Molly Munger who has a tax increase plan of her own?

We have $500 billion in unfunded pension liabilities, and spending has increased in this budget. And yet, the Legislature has rejected both your pension reform plan and a spending cap sponsored by Howard Jarvis Taxpayers Association. Why are we not contracting out more services to the private sector? Why can’t California—like many other states—simply live within its means?

California has 12 percent of the nation’s population but 33% of the welfare caseload. With roughly 20% of the budget going to Health and Human Service programs, if taxes are increased, why should we believe that our hard-earned dollars will be spent prudently?

The top 144,000 taxpayers contribute 37% of California’s Personal Income Tax revenue. Will adding three new tax brackets to California’s already progressive tax system solve our structural budget deficit or make it worse by accelerating outmigration of high income earners?

Why have you doubled down on the controversial High Speed Rail plan which costs far more than the entire current General Fund budget? With six percent of General Fund revenue currently going solely to pay off bond debt (and projected to go even higher) can we afford a massive infrastructure project the viability of which is in serious question?

Governor, business as usual is no longer an option. Let’s stop the gimmicks and the threats and start budgeting honestly and with the full light of sunshine.