Tuesday, 09 August 2022

Harris: California needs real solutions

California is in the midst of a structural revenue shortfall.


Since 1978, California has simply not generated enough money to pay for its basic services, from public education to transportation to water.


The governor and the Republicans would have us believe that our budget deficit is caused by overspending in the "good times" that leaves us with huge shortfalls when the economy turns sour.


But there isn't $16 billion in "overspending" and the governor and the Republicans know it, as proved by his $4 billion cut for California public schools.


Others claim that the problem is locked in and/or frivolous spending, but here again, that only accounts for a tiny fraction of the massive deficit total.


These arguments simply reinforce the idea that spending on parks, schools, and social services is frivolous, whereas blatantly unfair tax favoritism is not.


Why is it that some Californians get the “frivolous” privilege of paying property tax rates that have not changed in 30 years?


Why aren't tax breaks framed as frivolous and wasteful leftovers from the "good times?"


That was how Mark Leno framed the VLF cut that the governor made as his first act as governor which costs the state some $5 billion each year.


Or the yacht tax loophole, which has the cruel effect of protecting the rich at the expense of the poor?


The real problem is that since 1978 this state has cut nearly $12 billion in taxes on an annual basis.


There are many possible saving and revenues solutions, as outlined by the non-partisan California Budget Project.


Some examples that could close the gap (in millions):


  • Raise the Vehicle License Fee to 2 percent = $4,838;

  • Tax commercial property at market value = $3,350;

  • Increase the corporate tax rate by 1 percent to 9.84 percent= $1,251;

  • Restore the top income tax brackets = $2,200;

  • And capping the deductible mortgage interest rate at $50,000 of interest = $80.


Finally, the Legislative Analyst’s Office, the Franchise Tax Board and Board of Equalization estimate that the state is owed up to an estimated $8.5 billion in sales, use and income tax that go unpaid each year. However, the governor proposes collecting only about $150 million of that next year and then $253 million in 2009-10. Of that $8.5 billion, hundreds of millions, if not billions more, could be collected.


Continuing to balance the budget with a cuts-only approach hurts vital services that all Californians need and deserve. Lawmakers must consider revenue increases to fund crucial programs that help children, the poor and working families. We look forward to working with the Legislature and the governor in passing a state budget that invests in the future of our children, our schools and our state


The law-abiding taxpayers of California deserve a budget that is fair.


Wanda Harris is chair of the Lake County Democratic Central Committee. She lives in Hidden Valley Lake.


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