Thursday, 27 January 2011

C'mon Jerry, Voters are Grown-Ups

I am getting tired of Jerry Brown saying he didn’t release a budget that doesn’t assume voters approve extending the current taxes, because he didn’t want to appear to be threatening voters.  I have read numerous quotes similar to this passage in today’s Sacramento Bee.

Brown said the proposed reductions are only half as bad as will be required if voters do not extend tax increases. He invited Republican lawmakers resistant to such a measure to describe an “all-cuts” alternative, asking, “Is it really fair and honest to keep that secret?”

Brown, fearful of being seen as threatening to voters, won’t release such a document himself.

“It’s so horrible that we don’t like to release it,” he said.
Rather than an “all cuts” budget, I would call it a “current law” budget.  Current law is that the tax increases expire, and I think it is dishonest not to propose a budget under those circumstances.  I have a hard time calling his budget more honest than his predecessors (as some seem to be) when it is also based on a highly uncertain revenue assumption.

Would Brown's "current law" or “all cuts" budget really reflect what he would really do if the revenues don’t materialize?  Or will it be crafted in such a way to create dramatic headline cuts in the most politically popular programs that will scare voters into supporting the tax increases.  If it is honestly reflects what he believes are the best choices and is prepared to do in the absence of revenues, then it isn’t threatening anyone even if some people find it scary.   And why is he saying that it is Republicans burden to propose an "all cuts” budget.  If the tax increases are voted down, it will still be Democrats creating the budget by majority vote.  The relevant alternative for voters to consider is what Democrats would cut or protect in that instance.  If Democrats put together an honest “all cuts” budget, then I think Republicans should not stand in the way of putting tax increases to voters.

I would also like to see a smaller, alternative set of tax increases put before voters as a substitute for extending the current package.  I  don’t particularly like the tax package that is expiring as it is regressive and further pushes up California’s high marginal rates on a low tax base.  As an example, I would prefer to see us expanding the sales tax base (reducing the number of items exempted from sales tax, especially amusements like golf and movie tickets), and applying an oil severance tax.  All these exemptions have powerful lobbies, and are tough to get through the legislature, but I bet the public might support them if framed as an alternative to the current higher sales and income tax rates on everyone.

About the Author

Ethan Jacob

Author & Editor

I am Ethan Jacob Executive Director of the Center for Business and Policy Research at the University of the Pacific, where I have a joint faculty appointment in the Eberhardt School of Business and the Public Policy Program in the McGeorge School of Law..

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