Message to Sacramento: Tax, but don’t overspend
California’s Democratic legislators must feel like they just ran the table. Voters approved Proposition 30, the sales and income tax increase sought by Gov. Jerry Brown, as well as Proposition 39, a corporate tax hike that lawmakers had tried in vain to enact themselves. In addition, Democrats appear to have picked up enough seats for a two-thirds majority in both chambers of the Legislature, enough to raise taxes without the support of a single Grover Norquist disciple on the other side of the aisle.
But before lawmakers start making plans to spend their bounty, they need to consider what voters expect in return for backing Proposition 30: an end to the fiscal shenanigans that have sent the state careening from one budget crisis to another.
It’s a rare thing for Californians to vote for a statewide tax increase; over the last decade, they’ve defeated 10 and approved only one, a 1% surtax on million-dollar incomes to finance mental health programs. To their credit, they recognized in Proposition 30 the chance to stop the budgetary bloodletting that had reduced per-pupil funding to 47th in the nation, jacked up tuition at public colleges and universities, frayed the state’s safety net, closed parks, slowed the state courts and limited access to popular community college classes. And in Proposition 39, they corrected a misguided tax policy lawmakers adopted in 2009 that encouraged multistate businesses to hire and invest outside of California.
The passage of the two tax measures will bring no real windfall to Sacramento, however. The $8.5 billion that Proposition 30 is expected to raise for the 2011-12 and 2012-13 fiscal years has already been spoken for in the state’s budget, and more than half of the $1 billion that Proposition 39 is projected to raise is reserved for energy efficiency and alternative energy projects.
Brown sold Proposition 30 in part as a way to avoid deeper cuts, in part as a way to solve California’s persistent budget problems once and for all. Doing the latter depends on the economy recovering steadily, generating enough revenue to fill the hole left when the proposition’s tax increases expire at the end of 2018. But it’s also contingent on lawmakers and Brown sticking with the cuts they’ve made since he took office and using the new money to pay down a decade’s worth of borrowing and deferrals, which siphon funds from current needs. And over the long term, the Legislature must reform a volatile tax system that’s dangerously reliant on revenue from high-income Californians.
The governor pledged Wednesday not to let Sacramento go on the sort of “spending binges” that marked the dot-com-bubble years. That’s the right commitment. Having convinced voters that they’ve put the state budget on the right path, it’s up to the increasingly powerful Democratic majority in the capital to keep it there.
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