Sandberg: Everyone needs to sacrifice
By Amy Sandberg
Dick Lyles makes several false claims regarding the governor’s tax initiative.
Amy Sandberg
First, California tax revenues have not increased. The conservative blog Breitbart recently reported “State tax collections for February [2012] shriveled by $1.2 billion or 22%. The cumulative fiscal year decline is $6.1 billion or down 11% versus this period in 2011.”
Second, Dick argues Governor Brown hasn’t “earned” the right to propose a tax initiative. Seriously? He’s twice been elected by the people as governor of a state with the eighth largest economy in the world, and was a two-term mayor of a major metropolis. What does the guy have to do?
Third, Scott Walker did not really balance Wisconsin’s budget. He used the “cash method” to make it look like he did. The cash method accounts for how much money is in hand at a certain point without looking at upcoming obligations and expected revenues. The GAAP method is the standard for every public company and most government bodies. It provides a more complete and realistic picture and eliminates this kind of sleight-of-hand.
Dick (and Walker) ignore that spending mandates don’t necessarily decline when revenue does. For instance, my personal revenue recently decreased by 30 percent. Obviously, I should reduce my spending by 30 percent. The problem is that I have a lease and I’m stuck for a period of time with expenses that match my previous income, not my current income. I can make cuts in discretionary spending, but that’s only half of what’s needed. I also need to increase my revenue.
Predictably, Dick blames unions for our debt crisis — even though salaries and pensions make up only 11 percent of the state budget. While unions make themselves hard to love in a lot of ways (pension plans, can’t fire a tenured teacher, etc), doing away with them is economic suicide. As union numbers have decreased, income inequality between the upper and middle classes has increased. The economy suffers when the middle class loses its buying power.
Nobody wants taxes raised. However, two-thirds of Californians surveyed say they don’t want further cuts in local government services either, and 60 percent of likely voters say that K–12 public education is the area of state spending they most want to protect from budget cuts. Dick conveniently ignores that California is heavily dependent on property and capital gains taxes for revenue which limits the government’s ability to adjust to economic downturns, like the housing busts. California also relies heavily on stock revenue, likewise limiting its ability to adjust during crises like the dot.com bust.
Wisely, Brown is addressing both the spending and revenue sides of the ledger to get us out of this mess. Brown’s initiative would temporarily increase personal income tax on annual earnings over $250,000, and increase sales and use tax by 1/2 a cent. New revenue would not only help close the budget gap, it would stabilize funding for K-12 schools and community colleges, and also guarantee funding for the public safety services that were shifted from the state to local governments in 2011.
As with all things, a balanced approach is the one most likely to work. It will require sacrifice on everyone’s part, not just the rich, and not just union employees. Politicians need to stop making unrealistic assumptions about tax revenues and rates of return. Republicans need to give up their insistence on no new taxes. Democrats need to stop their votes-for-protection agreement with those unions who refuse to make necessary concessions. And voters need to start behaving rationally rather than voting for contradictory mandates that hamstring the Legislature and governor.
Sandberg works in the book publishing industry. Reach her at sandberg8462@yahoo.com.
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on Jun 13 2012. Filed under Columnists.
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Amy, you said "two-thirds of Californians surveyed say they don’t want further cuts in local government services". Does that surprise you when 50% don't pay any taxes? Do you think they would want further cuts? It doesn't take many tax paying liberals to get the number to two thirds.
Here you are, struggling to pay your rent without sufficient revenue. Yours is a perfect example of what is occurring throughout our country yet you continue to support a state and federal regime that is taking us further along the path to socialism while driving the economy further into the rat hole.
Viva Scott Walker and Dick Lyles!
A Greek businessman was quoted today in the Washington Post: "“You could see it wouldn’t last. The country was just borrowing money,” Choutlas, whose Proodeftiki Technical has been scaled back to a handful of employees, said as he jabbed a finger in the air for emphasis. “Nobody, nobody, nobody, said lets take a look at where we are going.”
We too are listening to a Dance Therapist who says we can dance forever without paying for the drinks, the band, or the dance hall.
California, with 12% of the nations' population has almost 35% of the nations' welfare cases — that ALONE should tell you that we are being badly mismanaged. (In that case, because California opted out of some of the serious reforms put in place through a bi-partisan effort of a Republican Congress and a Democratic President — Bill Clinton.
There are 9,111 names on the CALPERS Pension list of people CURRENTLY collecting more than $100,000 a year in pensions from their California government jobs, plus another 5,259 teachers and administrators collecting more than $100,000 a year in pensions from the CALSTRS Pension fund.
Add to that, we have 330,000 current teachers who are among the top five paid state's teachers, while their student's performance averages in the bottom five states — most recently (just three weeks ago) California students tied Hawaii and finished 47th in US Department of Education Science tests — just ahead of Alabama and Mississippi!
And, Amy wishes to raise taxes? 'Gimme a Break!
Because cutting taxes has worked out so well for the U.S. and British economies, right Allen?
Has it occurred to you that there may be other reasons–other than people who live in CA are deadbeats, or California has too lenient a welfare policy–for why the welfare rolls are so high here? Like maybe the high cost of living? Perhaps the minimum wage is too low? Insurance premiums and health care costs are out of control? Use your noggin' for something other than regurgitating Fox News statistics for once.
CALPERS, CALSTRS and the US Department of Education numbers are suddenly "Fox News?"
No wonder we have a "failure to communicate."
Allen, I know that you know when the liberals have nothing logical to say they play the Fox News card. How do they know what's on Fox since they purport to never watch it? Don't they know some of their compatriots, like Juan Williams, Allen Combs,Bob Beckel, and many other liberal, appear regularly on Fox. Were it not for Fox many of them would not have a job. MSNBC can only hire so many because they are watching their bottom line and not giving away the company store because of their ideology.
Hey Tom, Guess what? I watch Fox news twice a week at the gym. Know thy enemy ;-) right?
While we're on the topic of logic, what kind of logic is it to say that since our schools are failing we should slash their budgets?
Amy, I have not once said we should slash school budgets. i contend that not enough of it goes into the class room. Too much parental responsibility is being taken away by liberal psychos.
Give the teachers more resources to optimize their classroom strategy and you will see some real creativity. Allow them deal more effectively with the 20% who will never make a difference, but take 80% of the teachers time.
I'm glad to see you are going to the gym. I now know you are doing something right.
Amy, your reply seems to intimate that people have a right to live in California – on someone else’s money.
Interesting point.
Does Amy have a right to live in Beverly Hills on some else’s money?
Do I have a right to live in Rancho Santa fee on someone else’s money?
150 years ago, it was common to be born, live, work and die in a small community. If your father worked in a coal mine, or a steel mill, you were most likely to work in the same mine or mill.
Those days are gone, Amy. In six hours you can be in any city on the mainland of this vast nation, and if you can’t make it here then go where you can.
Now, as to why California has 12% of the population and almost 35% of the welfare cases, may I point you to that Manpower Demonstration Research Corporation (MDRC), a research study group on the subject, founded and funded by the liberal Ford Foundation has done such a study.
From their report: “Time limits on benefit receipt became a central feature of federal welfare policy in the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA)… While PRWORA prohibits states from using TANF block grant funds to provide assistance to most families in which an adult is included in the TANF cash grant for longer than 60 months, it allows states broad flexibility in designing time-limit policies. States can impose a 60-month time limit, a shorter time limit, or no time limit… The largest states that do not terminate assistance after reaching 60 months are California and New York.”
California is now cutting off some adults, but not any children after 60 months, and FIVE YEARS on welfare is a VERY LONG TIME. In many states, it is 24 months, as in Indiana. In Michigan it is 48 months. ALL states can get federal grant money to extend 20% of their cases beyond 60 months!
(Perhaps, Amy, you notice that California has a $17 billion deficit.)
Is Indiana a Charles Dickens hell-hole because it limits welfare to 24 months?
It seems to me that there is a built-in incentive to move from a state with 24 months limit to a state with a greater than 60 month limit.
Travel permits not just relocation for jobs, but for benefits. Some move for one, some for another.
Interesting how you assume something about my point of view Allen and then write a whole column based on a false presumption. Don't you have your own column?
Sorry, Amy, I just hate to see numbers misused.
You say " even though salaries and pensions make up only 11 percent of the state budget."
By law, schools are 40% of the state budget. By law, 80% of the education budget must be salaries. In every culture using the Base 10 math system, 80% of 40% is 32% — just for (primarily) teacher pay. Minimum.
Multiply that time the number of teachers, 330,000 state K-12 teachers, equals a GRUNCH of money! ("Grunch" is a highly technical economics term…well understood in Greece, Spain, Italy….)