Now that voters resoundingly said "no" to Governor Schwarzenegger's plan to fix California, he has decided to get back at us by slashing $24 billion in program cuts, including the elimination of healthcare for poor children, the elimination of scholarships for poor students to the state's public universities, shutting down 80% of our parks and much more. If the Legislature does not give him what he wants by June 30, he claims that he will simply shut down the state. Perhaps he will also hold his breath until he turns blue.
The Legislature has been reduced to hearing desperate appeals from deserving individuals, groups and organizations. We need healthcare, scholarships, parks and dozens of other vital programs. We realize that there will be cuts, but we should demand that these programs we want be cut less.
Here are a few things the legislature should do immediately to lessen the pain. The Governor will not like them. The out-of-touch, “anti-tax,” Neanderthal Republicans in the Legislature will hate them. Finally, conservative Democrats or, to modify a term from the Republicans, DINOs (Democrats In Name Only), will worry that they may not get re-elected in their right leaning Districts next year.
If most politicians oppose it or are afraid it, it must be a good start on substantive change.
In September 2008 and again in February 2009, the Democratic leadership bought off Republican support for their budget package by offering up tax breaks for certain Republican friendly businesses. These tax breaks allow corporations to share credits with affiliated companies. Next, the corporations were permitted to use losses incurred this year in exchange for rebates on previous year taxes. Finally, multi-state and multinational corporations were allowed to choose which tax formula was applied to them, with the obvious result of reducing most of the taxes the corporations owe in California.
We have near unanimity among the populace and the politicians that we do not want to drill for oil off California’s coast. What some forget is that California has more than a dozen of the United States' largest oil fields, including the Midway-Sunset Oil Field, the second largest oil field in the contiguous United States. However, unlike other oil-producing states, California does not impose an oil extraction fee or tax. Almost all other oil producing states impose some sort of fee or tax on oil extraction, which is then spent on a variety of public services. With oil prices rising rapidly, the state is giving away literally billions of dollars that could pay for any number of public services that other states are using to help weather the economic storm.
The administrative rules that govern the assessment of commercial property in California are archaic. These rules were written for situations that existed before Proposition 13 passed in 1978. They allow companies that own commercial real estate to get around updating property values except under certain, unusual circumstances. Commercial property undervaluation has shifted the burden of property taxes from businesses to homeowners — certainly not what voters had in mind when the voted to enact Proposition 13.
California voters made medicinal marijuana legal in 1996. Today, with a doctor's prescription, Californians are purchasing hundreds of millions of dollars of marijuana for medical purposes. Unfortunately, the state has never gotten around to requiring that sales tax be charged in transactions involving medical marijuana. Other medicines are taxed when sold. Regardless of how one feels about the legality of medicinal marijuana, we should all agree that it is sold and when sold, it should be taxed.
As I have argued previously, the state has a “rainy day” fund of $4.5 billion to be used in an emergency. The Governor and the legislature should agree that the current budget crisis is an emergency and access those reserve funds to help resolve the emergency, save lives and preserve services until the economy gets better or state government begins to get a handle on the crippled budget crisis.
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