ny and ca are in a race to the bottom...
Posted on 12/17/2008 4:27:59 PM PST by NormsRevenge
And just when you thought the budget saga couldn't get any more bizarre. If this were the Olympics and even if you hated it, you'd have to score some style points on the acrobatic budget maneuver unveiled this afternoon.
Democrats, frustrated with GOP refusals to vote for any tax increase to erase any part of the state's fiscal problems, have now decided to push forward a budget plan that includes $9.3 billion worth of new revenues... revenues they say don't require a single Republican vote.
Fasten your seatbelt. Here goes:
Democrats say the plan (which legislative attorneys have reportedly vetted) is "revenue neutral," meaning that the bill to be considered is a zero sum game to the state. And that, they say, means any new revenue... even a new tax... can be enacted with a simple majority vote.
But it's not revenue neutral to most Californians; on the contrary, the plan would add 13 cents to the price of a gallon of gas, a 2.5% surcharge onto everyone's income tax bill, a three-quarter-of-a-cent sales tax hike, and a new 3% withholding tax to independent contractors (who technically own their own business).
So how does a revenue neutral bill solve the problem? Pop a Dramamine pill before reading on...
Because, say Democratic budget staffers, it creates new revenues in the state's general fund, and takes away a relatively equal amount of revenues that now go to the state's special fund. And because the current shortfall is revenue that's evaporated from the general fund... well, there ya go: new revenue... and... revenue neutral. Presto!
The package also includes an oil severance tax that conforms with a plan proposed last month by Governor Schwarzenegger. And overall, it's estimated that it would bring in $1.5 billion in the current fiscal year, and $7.8 billion in the budget year to come.
The revenues are paired with $7.3 billion in cuts, which Democrats say are the same proposals they offered late last month.
All of this begs two questions: if it's such a great idea, why didn't Dems do it sooner? And what will Schwarzenegger do if this lands on his desk?
I asked the first question in today's news conference with Democratic leaders. Senate President pro Tem Darrell Steinberg's reply can be heard below.
(By the way, the "pledge" he refers to is the pledge almost every GOP legislator signed to not raise taxes.)
The answer to the second question -- what will the governor do -- may be the only other real news.
After all, this does seem to be at least a first step away from financial collapse. On the other hand, it would probably cement the frosty relationship with Republicans. And you can probably put a stopwatch to attorneys for a few interest groups who will no doubt run to court and try to block its implementation.
No matter what you think of this, it has re-energized the story for reporters... who've labored to write the same story with the same dynamics day after day.
Stay tuned, this one's a long ways from over.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
The idea that they are going to get $7 billion from an oil severance tax is fantasy. Right now, the oil market is already flush with excess supply and falling demand. If they slap on an oil severance tax on oil produced in California, the oil companies will simply buy their oil from other producers outside of the state. All this will do is harm the California oil producers.
same old crap...
A Recall wasn’t good enough before..
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Wrong target last time.
It should be the leadership of the legislature, and the half-dozen totally ignorant legislators who introduce new spending bills.
The governor can only suggest new taxes. The legislature must actually do it.
ny and ca are in a race to the bottom...
I add a small amount to our family income working at home as an independent contractor. Roughly 45% of my income already disappears in taxes due to having to pay all the FICA, etc.
And CA wants to stick me with a 3% tax hike just because I’m an independent contractor?
I don’t have words to express my anger. Maybe I should just quit.
The Gub also proposes the initial budget and ultimately signs off on it..
I’d recall the state officers from top to bottom, and the current legislative assembly and senate leaders, almost all of whom are dyed in the wool liberals anyway, including the Gub.
Atlas Shrugged... or Puked, as the case may be.
These people are absolute cowards. They don’t want to make the hard choices that need to be made.
Worse, their contortions - if they hold up (which I doubt) - will probably have the opposite effect desired. California is already taxed to the brink and pushing more will send revenue to the other side of the laffer curve. Businesses will shift revenue out of state, people will hide income, and consumers will simply start buying things online from out of state stores.
We need to organize a recall of everyone who votes for this bill. It is such blatant trickery and doubletalk that there are plenty of democrats who will either oppose the bill or agree that this kind of chicanery is no way to manage a state. Anyone who supports it is insulting their constituents.
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