$49 Is No Windfall : Governor’s Tax Rebate Insults a State Beset by Problems

You’ve just received a $49 bonus. As you leave work you decide to take the family to dinner with your unexpected cash. But as you reach your car, you notice a slight hissing sound coming from one of your tires. You are faced with a choice: a new tire or a modest dinner. It’s an old tire with a slow leak, but if you keep putting in air it might last a while longer.

This is the same choice the state of California faces. A strong economy has boosted tax revenues for the 1986-87 fiscal year by a little more than $1.5 billion. Some costs have gone up which reduce the available surplus to about $700 million. Our roads are in bad shape, our schools are overcrowded and local governments are having a tough time funding adequate police and health services--and Gov. George Deukmejian wants to take us all out to dinner with the extra money by giving us each about a $49 break on our taxes.

I like going out to dinner as much as the next guy, but something tells me we ought to fix the leaking tire.

The governor’s proposal is designed to comply with the Proposition 4 appropriation limit established in 1979 by the voters. This limit restricts spending from taxes to the amount spent in 1979 adjusted for inflation and population growth. While the concept of a limit on government spending has merit, Proposition 4 is seriously flawed.

Allowing the 1979 budget to control what we do today is the worst sort of folly. In 1979 the number of kids in public schools was declining. Today enrollments are increasing by more than 100,000 new students each year.

In 1979 we were operating under Jerry Brown’s “era of limits” transportation budget that virtually halted freeway construction. Today we have more than 4 million more cars on our roads than we did a decade ago. In 1979 the extent of toxic contamination in our state was unknown, AIDS was undiscovered and our prison population was one-third what it is today.

Our personal income has increased significantly since 1979. We have the resources to cope with these problems (and without a tax increase) if we decide to change the Proposition 4 limit to allow the state to spend the additional revenues already flowing into the treasury.

Several proposals have been introduced to modify this limit, including my own Senate constitutional amendment number 10. A strong coalition of groups led by supporters of public education will almost certainly be able to place such a measure on the 1988 ballot. In the meantime, a variety of methods are available to redirect this $700 million.

Every politician likes giving back tax money. Handing out money is a great political tactic. But leadership requires telling the voters the truth about our situation. Sometimes it requires asking the voters to spend a little less and invest in their future a little more.

Unfortunately, this concept of leadership seems to have gone out of fashion. At the federal level politicians have cut taxes more than spending to create the largest deficits in history.

At the state level we have been a bit more responsible. We have cut taxes by more than $120 billion in the last decade, but we also have held down spending to maintain a balanced budget, as required under the state Constitution.

However, part of those tax cuts were financed by cutting funds for things we once took for granted: public libraries, adequate road maintenance and quality schools.

Since Deukmejian seems determined to tell us only the good news, I think it is important to provide perspective by mentioning some of the bad.

Traffic congestion threatens to choke our cities, while maintenance too long delayed is causing many of our roads to deteriorate rapidly. This is not surprising since California now ranks 50th in per capita expenditures on transportation.

The state’s failure to provide adequate money for transportation is forcing counties to rely on local funding for highway improvements, which end at the county line. In places such as Orange County, congestion is so bad that economic growth is being stifled. In that county things are so serious that legislation is moving through the Senate to allow the construction of toll roads. So California, land of the automobile and home of the freeway, may soon become a patchwork of mismatched highways interspersed with toll booths.

When it comes to our schools, we have the unpleasant distinction of having the most overcrowded classrooms in the country. While the other major industrial states have recognized that a changing world economy demands the highest quality public education system, California, which is even more dependent on high technology industries than most states, ranks 39th in the percentage of personal income invested in public education.

The $700 million the governor wants to return to us would cover the cost of reducing the size of high school classes to about 20 students each next year. Or it could be used to start reducing traffic congestion. It would go a long way in helping us clean up toxic contamination, or preventing the spread of AIDS, or housing the homeless, or providing better medical care to the elderly and disabled. Or we could all take our families out to dinner.