California’s Budget Crisis

I must take issue with a letter by Democratic Assemblymen John Vasconcellos and Tom Hannigan (July 17). Let me just address their principal points:

Statement: “Contrary to Wilson’s charge, the Democratic budget proposal does not contain new taxes.”

Fact: The Democratic proposal does provide for withholding of income taxes from independent contractors. This proposal was introduced last year and found to put a heavy new administrative burden on small business.

Statement: “Contrary to Wilson’s charge, the Democratic proposal does not require deficit spending.”

Fact: The Democratic proposal requires deficit spending because it ignores more than $900 million in expenses incurred to provide medical services to the poor by moving California out of compliance with nationally accepted accounting practices.

Statement: “Contrary to Wilson’s claims, his proposed budget does include new taxes and fees.”

Fact: The governor’s proposal does not contain any new taxes. The governor’s proposal does contain some fee increases, primarily to maintain quality in and access to the state’s higher education programs. In several cases, the Legislature has proposed fee increases well beyond the level the governor is willing to support.

Statement: “Contrary to Wilson’s claims, his budget does roll over spending (by delaying the start of school for one year for 110,000 kindergartners).”

Fact: The governor’s proposal to admit all kindergartners at age 5 and older, rather than at age 4 years and 9 months and older, is the standard policy in most states. Studies have shown that the additional maturity helps younger students academically. The California Teachers Assn. strongly supported this proposal in 1985.

Statement: “Contrary to Wilson’s claims, the governor never provided a balanced budget plan prior to start of the new fiscal year.”

Fact: The governor met his constitutional responsibilities with the budget he proposed on Jan. 9. And he joined the Republican legislative leadership to propose a new balanced budget on June 19. A key part of that proposal was defeated by the Assembly on June 30. The remainder of the plan is still pending in the Legislature.

Pete Wilson remains committed to the belief that the last thing Californians need are higher taxes and Washington-style budget deficits.

TOM HAYES

Director of Finance

Sacramento