Gatto and Ramani go into detail
MIKE GATTO: 1) California faces projected budget deficits of close to $20 billion annually for the next several years. What specific steps must the state take to achieve a balanced budget?
To paraphrase Winston Churchill, the next few years are likely to bring more financial “blood, toil, tears, and sweat” to California. This is the result of years of bad policy. I have already taken what I believe is the most significant step towards a balanced budget: The establishment of an enhanced “Rainy Day Fund,” a savings account for the state.
Every household in California tries to follow the simple maxim: When times are good, you save some money for when times are not so good. We must force Sacramento policymakers to follow this common sense approach, and we would not face a deficit of this magnitude if we had put some money aside during the boom years.
So, I just authored a proposed constitutional amendment that would establish this fund, and which also requires us to pay down debt and live within our means, so that we don’t burden future generations. I am proud to report that it passed the Legislature last week, and was signed by the governor.
2) Name three programs or departments that should face reductions/elimination, or explain if you cannot.
We need to end the practice of not enforcing state anti-fraud laws. This results in boondoggles, like $69 million in state aid for the impoverished being used on cruise ships and casinos. Adequately supporting the “watchdog” agencies and insisting on enforcement of program regulations would result in significantly fewer losses of taxpayer dollars.
We need to end the practice of forcing taxpayers of well-run cities to pay the exorbitant pension costs of other cities. I am very angry that Glendale residents will be forced to pay the inflated pension costs for an employee who went to work in Bell. I have authored legislation, which is pending, that would cap the taxpayers’ exposure to these inflated pension costs. That money could be much better spent by cities to fill potholes, pave roads and pay for other local services.
Finally, we need to end programs that give blatant handouts to special interests, and we need to close the loopholes that allow entities to engage in “offshoring” (where corporations open “headquarters” — often no more than a P.O. Box — in places like the Cayman Islands to avoid paying their fair share of taxes.) When any entity is allowed to shirk its tax burden, it places more of a burden on us. We pay our fair share, and these loopholes and special-interest giveaways must be ended, so that everyone pays their fair share.
3) Name three ideas to raise revenue for the state, or explain if you cannot.
We need to retool our tax system to make it more fair, more consistent and more in line with our 21st Century economy. Right now, we are living with a 1930s-era tax system that is failing a 2010 economy because the system is so subject to wild fluctuations.
The state generates plenty of revenues, we just need to average them out over a few years. I already mentioned my Rainy Day Fund, the savings account for the state. I’d also like to see two-year budgets, which would force us to lengthen our outlook.
I favor less dependence on the capital-gains tax, which results in greatly reduced revenue when people stop selling houses and stock at a profit. Finally, we should close tax loopholes, end tax dodges, like corporations establishing fake offshore headquarters to avoid taxes, and ending job-killing policies like basing business taxes on payroll, which only forces good-paying jobs out of state.
4) Where do you stand on Proposition 19, legalizing recreational use of marijuana?
I oppose Proposition 19. I also point out that a ballot initiative can only be undone by another ballot initiative, and not by a legislative vote. Unlike most other issues, with ballot initiatives, the only vote that legislators get is our vote in the ballot box.
5) What are the most important steps the state can take to boost private-sector employment?
First, the state should end its practice of basing business taxes on payroll, which is, in effect, a tax on California jobs, and only encourages companies to shift jobs out of state.
Second, we need to invest in infrastructure, like in the days of old, which will not only create jobs in the short term, but make it more attractive for the private sector to locate or expand their operations in California.
Third, we must continue to encourage innovation in emerging sectors, like renewable energy and other technology jobs. Fourth, we must do everything possible to keep in California the industries that we consider traditional Californian industries, like the entertainment industry. We’ve already lost most aerospace jobs, and that was a huge mistake.
6) What is your top transportation priority for the district?
The 43rd Assembly District is bisected by some of the most congested freeways in the county, and yet still suffers from a lack of comprehensive light rail and public transportation options. During my days with Congressman Brad Sherman, I worked to implement the successful Orange Line in the valley, and will work in the state Legislature to create other functional, flexible public transportation options.
I also believe that we must make our streets safer for cyclists, pedestrians and even other motorists. If that means giving local law enforcement the tools to toughen certain speeding laws in a given neighborhood, then we should do that.
7) What is your top economic priority for the district?
Besides implementing the good-government policies and reforms I’ve detailed above, my top economic priority is creating jobs and ensuring that our schools have the funds they need to prepare our children for success. It is “penny wise and pound foolish” to expect Californians to be prepared well for future employment if we give education short shrift.
8) Passing a budget or tax increase requires a two-thirds vote in the Legislature. Would reducing the requirement to a simple majority help or hurt the state, and why?
It’s important to distinguish between these two rules, because they are separate: One rule requires a two-thirds vote to raise taxes, and one requires a two-thirds vote to determine how to budget the existing revenue.
After watching year after year of late budgets loaded with billions of special-interest giveaways to win the votes of the last few holdouts, I think we have to conclude that allowing a majority to pass a budget would result in far less pork.
Our budget process is broken. We are one of only three states in the nation that requires a supermajority to pass a budget.
9) What do you view as your signature issue or priority?
There are certain people who enter the Legislature with a passion for one specific issue, but often those passions get off-track and become a focus on little things, while the big picture is ignored.
The ship is in danger of sinking, and yet some continue to focus on re-arranging the deck chairs. I try to be a big-picture thinker. To the extent that I have one priority, it is fixing our broken tax system so that it is fairer to families, schools and cities, reduces our dependence on boom and bust cycles, and makes sure that special interests are paying their fair share.
To the extent that I have one passion, it is good government, as everything else depends on it.
10) Why are you a better candidate for the job than your rival?
I ran for this office because I believe my experience, qualifications, ideas and energy make me the right person to help restore the California that we know and love.
I grew up here, I’ve lived here most of my life. I believe I understand and represent the needs and priorities of the residents of the district, and will work tirelessly to protect our community and fix the broken budget process in Sacramento.
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SUNDER RAMANI
1) California faces projected budget deficits of close to $20 billion annually for the next several years. What specific steps must the state take to achieve a balanced budget?
We must be realistic on several fronts.
Much of the state’s tax receipts are restricted due to a multitude of special interest legislative impacts to the budget (public employee pensions, education, bond repayment, etc.). There is very little left of every dollar the state takes in after the mandated spending is funded. Additionally, the state budget is created with generous predictions of future revenue.
No one knows what the future will bring, especially these lawmakers. Our tax revenue should be projected on the conservative side with expenses allocated accordingly.
In the short term, we should not institute new spending programs that are not absolutely critical, pare existing non-essential programs and review all regulatory burdens that impede business growth.
Long term solutions should include top to bottom review of all commissions, boards and agencies to eliminate duplication and inefficiency; freeze new hires for non-essential personnel until positions have been thoroughly evaluated for need; no new programs should be implemented until a consistent revenue stream has been identified to pay for programs; begin the budgeting process earlier in the fiscal year; create a reserve fund to smooth out uneven tax receipt years.
2) Name three programs or departments that should face reductions/elimination, or explain if you cannot.
Every department should be reviewed to determine their efficiency. Our state has taken several decades to reach the current level of decline. Bureaucracies granted that much time could use a top to bottom evaluation for relevance and efficiency.
All boards and commissions should be reviewed as well, as this state has created an abundant (and sometimes redundant) number of commissions (which often serve as retirement perks for termed out legislators).
A review of the Department of Education is warranted as well. Education dollars sent to the state are not returned to the local districts in commensurate levels. The education funding model deserves to have dollars stay with the local communities without Sacramento skimming or mandating away the funds.
Additionally, we need to review the annual costs of keeping someone in prison. With cuts occurring to our productive members of society (students, workers, public safety), it seems our incarceration costs are disproportionately skewed.
3) Name three ideas to raise revenue for the state, or explain if you cannot.
We need to create conditions for economic growth, which will, in turn, increase revenue for the state. Californians need to (and deserve to) start working again. Creating favorable conditions for new and existing businesses to risk capital is paramount to economic recovery.
Reducing regulatory burdens is also a good first step in getting businesses to hire again. Paychecks create payroll taxes, sales tax and consumption activity that will provide benefits across the economic spectrum. You can’t love jobs and hate the people that create them.
Additionally, we need to be robust in our recruitment of businesses to relocate in California. We have large pockets of distressed housing in various cities, where a substantial level of community infrastructure is already in place. Businesses look for areas where housing stock is plentiful, and communities are already built out.
Recruiting businesses to these areas will provide for jobs, property tax in formerly abandoned or foreclosed homes and revitalize distressed local communities.
4) Where do you stand on Proposition 19, legalizing recreational use of marijuana?
I oppose Proposition 19. Law enforcement has indicated that this is another item that will be their responsibility without the funding to support it, and the medical community remains divided over the long term health effects of marijuana use, especially among teens and young people.
Furthermore, there is substantial evidence that drug cartels have already infiltrated this market and will no doubt be at the center of significant, eventual associated problems, including illegal distribution (both in terms of quantity and method), which will naturally undercut the proposed legal market.
Medical marijuana workers are already discussing unionization which, coupled with state taxes on the drug, will drive up the cost of “legal” marijuana and deprive the state of the tax revenue used as the fiscal basis for promoting this law.
Moreover, federal narcotics law still trumps state law, which may effectively void the state law even if passed.
5) What are the most important steps the state can take to boost private-sector employment?
Reducing regulatory burdens on small business is a first good step. Small business creates nearly 60% of the jobs in California. Small business suffers disproportionately in regulatory compliance, and therefore is harmed greater than larger businesses.
The governor’s office released a study last October, where it was illustrated the average annual cost of compliance per small business is $134,000. These are dollars better used to hire more employees, or increase existing employee compensation.
We have chased manufacturing jobs (one of the largest sectors for jobs) from this state with burdensome regulations, and we now stand in wonderment as to where those jobs went.
6) What is your top transportation priority for the district?
Dense urban areas are mired in constant traffic gridlock. Time lost commuting is costing this district’s residents significant quality of life and adding to environmental concerns.
Smart planning, with careful consideration of how development impacts the transportation infrastructure, is key. Developing incentives for cost-effective alternative modes of transportation will be key to managing our already overcrowded infrastructure.
7) What is your top economic priority for the district?
Jobs, jobs, jobs! Small businesses will pull us out of this recession, and we need to remove the hurdles that impede their ability to be effective job creators.
Our next generation of young adults, as well as the many adults that have been jobless, will most likely be hired by small business.
8) Passing a budget or tax increase requires a two-thirds vote in the legislature. Would reducing the requirement to a simple majority help or hurt the state, and why?
Legislative districts have been gerrymandered for the last decade. One party has largely controlled the state Legislature for nearly 40 years. Their last obstacle to passing a budget without reflecting spending cuts is the presence of the 2/3 supermajority law.
The adoption of a simple majority rule would result in larger budgets, where everything becomes a “critical” priority, and the mechanism to pay for this will be higher taxes on the middle class. The rich have the ability to be fluid with their money, as we have seen nearly 1.4 million fewer tax filers in California since 2004.
Removal of this constitutional requirement would reward those who have demonstrated long term fiscal mismanagement, imperil California taxpayers and remove one of California’s most important “checks and balances” mechanisms.
9) What do you view as your signature issue or priority?
My “signature issue” is not singular, but systemic.
California is dysfunctional. Our state once led the nation in economic growth and innovation, education, quality of living and many other desirable metrics. Mismanagement and poor policies have driven California to the brink of insolvency and compromised the quality of those public institutions, such as our schools, that have traditionally played an important part in the California dream.
We need to make government work for the people again, not the other way around. We have allowed this state to become the manager of too many elements of our lives — elements that would be better served by individuals and the private sector.
We need to make a commitment to returning California to a productive, business-friendly state with lower taxes and a streamlined state government that is responsive to the needs of its citizens. We need to do more with less.
10) Why are you a better candidate for the job than your rival?
My last 25 years have been spent serving many segments of the surrounding communities. From my service at Providence St. Joseph Hospital Foundation, to chamber of commerce boards, to educational foundations, to service clubs and to nonprofits, I have been a participant in growing our communities.
I am a Main Street businessman that has strived to give back more than I take. My experience signing the front of a paycheck as well as the back, to my experience with parents and schools in educating our children, have provided me with a broad foundation on what our community needs and wants.
As a parent of a college-age daughter and a high school-age son, and with a physician wife, I have been blessed with a supportive family that has fostered my drive to make a difference on behalf of all of us.
Relevant experience in solving our collective problems is needed, not political career interests.