Posted on 04/10/2006 6:59:30 PM PDT by NormsRevenge
Two-and-a-half years ago, Gov. Arnold Schwarzenegger stormed to power in an unprecedented recall election, vowing to end the gross fiscal mismanagement seen under Gray Davis. Since then, the budget picture has brightened – primarily because of big revenue gains and slight slowing in spending growth. Nevertheless, a vast annual “structural deficit” of at least $5 billion remains.
So the 2006 governor's race is likely to hinge on how candidates say they will right California's fiscal ship, just as in 2003?
Not even close. In fact, none of the three leading candidates have a credible plan to fix this mess.
Here's how Democratic state Treasurer Phil Angelides would balance the books: by sharply raising corporate tax revenue by “ending loopholes” – what a chestnut that is – as well as by raising income taxes on big earners.
Given that spending – adjusted for inflation and population growth – is sharply higher than it was in the 1990s, we are utterly unconvinced that Californians are under-taxed. Nevertheless, we concede that a candidate who wanted to raise some taxes while holding the line on spending could credibly claim to be taking a constructive approach to balancing the budget.
But the problem, of course, is that Angelides wants both hefty tax hikes and all sorts of new spending – at least $2 billion on schools, $1.5 billion for colleges and universities, $300 million for health care, etc.
At least the other leading Democrat, state Controller Steve Westly, says he would only raise taxes as a last resort. But Westly appears to back at least as much new spending. Meanwhile, the former eBay executive offers a whopper as big as Angelides' claim that closing loopholes can add billions in revenue: Westly asserts that his crackdown on tax cheats has yielded $3.5 billion for the state and hints at similar efforts as governor. This is a laughable exaggeration, as Westly knows full well.
Unfortunately, the use of rhetorical whoppers extends to the incumbent, a reformed tightwad. Schwarzenegger insists there is little difference between the parsimonious first two budgets he proposed and his profligate 2006-07 fiscal plan. The governor would increase spending by 8 percent even as revenues only go up 4 percent – and some of the $15 billion the state borrowed in 2004 explicitly to retire Davis-era debt instead would be used to retire debt run up on his watch.
This collective denial of fiscal reality is a crying shame. At some point, California is going to have a painful reckoning. Had Schwarzenegger stayed the course on spending and been re-elected, a soft landing was possible. Instead, something much uglier looms: a future governor and Legislature forced by credit-rating agencies into tax hikes so big that they cripple the economy.
It would be nice if Schwarzenegger, Angelides or Westly brought this to voters' attention. At least in 2003, voters cared about red ink. But at this point, it may be too late – because the big three don't really want to solve the state's problems. They just want to sell their whoppers.
3 years later and we are staring at the same problems.
CA: Here We Go Again (Assemblyman Ray Haynes on budget crisis)
Metropolitan News-Enterprise ^ | April 10, 2006 | Ray Haynes
Posted on 04/10/2006 4:52:31 PM PDT by calcowgirl
"Angelides wants both hefty tax hikes and all sorts of new spending – at least $2 billion on schools, $1.5 billion for colleges and universities, $300 million for health care, etc.
At least the other leading Democrat, state Controller Steve Westly, says he would only raise taxes as a last resort. But Westly appears to back at least as much new spending. Meanwhile, the former eBay executive offers a whopper as big as Angelides' claim that closing loopholes can add billions in revenue: Westly asserts that his crackdown on tax cheats has yielded $3.5 billion for the state and hints at similar efforts as governor. This is a laughable exaggeration, as Westly knows full well."
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These are the candidates running against Arnold.
The article tries to make us believe that Arnold will have to raise taxes, when in fact Arnold REFUSED to raise txes despite the pressure from the Dems.
Nobody in their right mind could possibly prefer the Dems over Arnold.
Not raising taxes is the last thread you're hanging on to, huh? If and after he wins and signs off legislaton to raise them down the road, what will you have left to offer?
The final tote after the election will be interesting and revealing. Even the great Rove may not be able to pull this one off, no matter how many folks he sends in to help the Gub.
Say Hi to McCain at the campaign stops.
Arnold needs to stop consulting with his democrat buddies and start listening to Republican legislators who do NOT support his big borrowing plan or his continued deficit spending.
Big borrowing will lead us to the same place the democrats want to take us.
Why can't Arnie stand up to theses weenies and refuse to sign the budget until they cut spending? What are they gonna do - lower his poll numbers? I personally don't care if the state government gets shut down for a few weeks or months.
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")
Only the ones in their "left" mind do.
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