California to put tax increases on the ballot

[belcherboy]

It will be interesting to see what the people vote. With these taxes mainly affecting those who make $250k and above, it seems like it would pass (although many places in Cal have high levels of income). There probably is a lot of people that make north of $250k in California, so we shall see if it passes. I've got a feeling that this may start the domino of these types of votes in other states.


Gov. Jerry Brown implores California voters: Please raise taxes on yourself - CSMonitor.com

Gov. Jerry Brown implores California voters: Please raise taxes on yourself

Republicans blocked the efforts of California Gov. Jerry Brown to fix a budget crisis through more tax revenues. So his new plan is to go straight to voters in 2012.

Gov. Jerry Brown on Monday proposed a ballot initiative that would ask Californians to raise taxes on themselves.

Facing huge deficits despite $10 billion in budget cuts last year, California needs new tax dollars in order to avoid catastrophic cuts to schools and government services for the elderly, Governor Brown said.

His plan includes a 1 percent income-tax-rate increase for individuals making more than $250,000 per year, and a 2 percent rate increase for those making more than $500,000. It would also increase the state sales tax by half a cent to 7.75 percent.

RECOMMENDED: Why Americans won't raise taxes

In total, at least 10 initiatives that propose tax increases are vying to qualify for the 2012 ballot in California – a sign that the state that led the national tax revolt with Proposition 13 in 1978 might now be considering at least a partial reversal of course.

With many states still focused only on cuts, such a bold statement from California could reverberate nationwide – either giving other states cover to try similar measures or showing that, even with budgets in dire straits, tax increases are a political impossibility.

“A victory for tax increases in California could encourage similar moves in other states,” says Jack Pitney, a political scientist at Claremont McKenna College. “If the tax measure goes down to defeat – in a blue state running a huge deficit – the effect would be to chill such proposals in other states for many years to come.”

Brown’s proposal is projected to raise $7 billion per year and would expire in 2016. On Monday, he dismissed the idea of going through the Legislature, where a two-thirds vote is needed for raising taxes. Indeed, Brown tried to go through the Legislature earlier this year to get a tax measure put on the ballot, but Republicans blocked him.

So now the plan is to collect enough citizen signatures to put his plan on the ballot without any input from lawmakers.

“I am going directly to the voters because I don’t want to get bogged down in partisan gridlock as happened this year,” said Brown in a statement. “The stakes are too high.”

He suggested that the state can’t make any more cuts responsibly. “Spending is now at levels not seen since the ’70s,” he said. “Schools have been hurt, and state funding for our universities has been reduced by 25 percent. Support for the elderly and the disabled has fallen to where it was in 1983.”

“The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety, and our courts,” he added.

The depth of recent cuts may have changed minds in California. Some 64 percent of California voters said they would pay more taxes if the money went to public schools, according to a November poll by the Los Angeles Times and the University of Southern California.

“Now people are seeing how spending cuts are hitting the most vulnerable – elderly and kids in school,” says Loyola Law School professor Jessica Levinson, former director of political reform at the Center for Governmental Studies.

But analysts say the sheer number of initiatives may overload voters. Moreover, Republicans could try to counter with initiatives of their own.

“While Brown may be successful in persuading some of his allies in his tax-increase battle to remove their initiatives from the ballot, one might imagine that his opponents will decide to pursue a voter misdirection strategy by seeking to add counterbalancing initiatives of their own,” says Lara Brown, a Villanova University professor and author of “Jockeying for the American Presidency.”

The stakes are high for what might follow in other states. “In the same way that Proposition 13 did, indications are that California is willing to turn the corner on what government is and our willingness to fund it,” says Barbara O’Connor, director emeritus of the Institute for Study of Politics and Media at California State University, Sacramento. “Perhaps it is time to lead the rest of the country out of the morass by example.”

[mtutiger]

It will be interesting to see what the people vote. With these taxes mainly affecting those who make $250k and above, it seems like it would pass (although many places in Cal have high levels of income). There probably is a lot of people that make north of $250k in California, so we shall see if it passes. I've got a feeling that this may start the domino of these types of votes in other states.


Gov. Jerry Brown implores California voters: Please raise taxes on yourself - CSMonitor.com

I'm not exactly sure votes like this are possible in many other states. California, due to the way they administer their direct democracy system, is one of the only states that allows voters to vote directly on fiscal matters such as taxation. Incidentally, this is a large reason why California is in such a fiscal crisis right now. Voters want too much, and don't want to pay for it.

[MrDeeds]

I'm not exactly sure votes like this are possible in many other states. California, due to the way they administer their direct democracy system, is one of the only states that allows voters to vote directly on fiscal matters such as taxation. Incidentally, this is a large reason why California is in such a fiscal crisis right now. Voters want too much, and don't want to pay for it.

Yes, and that's why the US is in such a fiscal crisis right now. Representatives want too much, and don't want to pay for it.

[mtutiger]

Yes, and that's why the US is in such a fiscal crisis right now. Representatives want too much, and don't want to pay for it.

What does the US House of Representatives have to do with the fact that California allows voters to vote directly on fiscal issues through the use of Propositions?

The voters in California really should pass this tax increase on themselves. They've passed countless Propositions over the years increasing spending and eliminating taxes, which basically makes it impossible for that state to function.

[ballmich]

Incidentally, this is a large reason why California is in such a fiscal crisis right now. Voters want too much, and don't want to pay for it.

Yes, I agree. But the politicians and special interests deserve a huge amount of blame, because when they can't get what they want passed in the legislature, they always use this end around and take the matter to a ballot initiative. Almost always. The the burden is then put on the voter, and they are generally sold a bill of goods, without understanding how the cost fits into the big picture of the state's finances. And you shouldn't really expect Joe Average to understand the State's finances with the kind of detail needed to really make an informed decision. That's the job of the politicians, not Joe Average, and while I wish California residents understood and took a more vested interest in these matters, it's probably not terribly realistic. Government budgets and ballot initiatives are hardly transparent, and certainly not easy reading matierals. For someone not that interested or perhaps not with much education, that is a very burdensome task.

Lots of blame to go around on this. The reality is the system isn't going to change until California fails, and it will fail. Probably within the next two years, I suspect. They never hit targeted revenunes with their budget, and the revenue misses are always by a wide margin. We're $3.7 billion behind the budgeted Revenue for the month of December alone (projected). For one month. These morons budgeted for a $4 billion revenue increase for the year --- that was never going to happen. Despite the fact that analysts said that revenues could not increase, the fools budget for it anyways...

Brown's proposal, even if he could get it passed, is too little too late. $7 billion in more revenue. We burn through that in 2-3 months of budget misses. That's nothing. And I'm not convinced he can get it passed. And if he does, that doesn't take effect until next fiscal year. Stupidness all around.

[ballmich]

Well, let the uproar begin again, if it ended. Automatic mid-year budget cuts taking hold January 1st. Looks like some of the hardest hit will be University and community colleges --- that's sure to result in lots more protesting. This is what happens when you forecast in $4B of increase revenue during an economic depression.

The next six months will be just as interesting. But even more fascinating is that some people are now projecting a $13B shortfall for the 2012-13 fiscal year. Brown's fandangled tax increase, which I don't think will pass, is estimated to only generate $7B in more revenue (and I doubt it reaches that if passed). So that would leave $6B in shortfall... Oh, I know, let's just fill that gap with projected revenue increase. That seems like a great idea.

[ballmich]

Oh really. Now here is a surprise.

Gov. Jerry Brown said Saturday that California's deficit has mushroomed to $16 billion, nearly $7 billion higher than he last estimated.

Read more here: Brown: California budget deficit rises to $16 billion - Capitol and California - The Sacramento Bee

You don't say. We're running $2+ billion a month behind plan? Who would've thunk?

[Gehringer_2]

I'm not exactly sure votes like this are possible in many other states. California, due to the way they administer their direct democracy system, is one of the only states that allows voters to vote directly on fiscal matters such as taxation. Incidentally, this is a large reason why California is in such a fiscal crisis right now. Voters want too much, and don't want to pay for it.

Aside from the wild west ballot prop system, I thinks it's also just a basic math problem. As my son has described it to me, in the CA current system it takes only a majority in the State Gov to spend money but a supermajority to raise revenue. Pretty good recipe for financial disaster.