Taxable Talk

A few years ago, California voters passed the Mental Health Services Tax. That tax is a 1% surtax on those making $1 million or more.

Come February 2009 the Legislature looked at how to balance California’s budget. Why not use some of that surtax? Proposition 1E would divert $230 million to the general fund of funds raised with the Mental Health Services Tax.

I don’t have an opinion on the measure. I do, though, have an opinion on the title of the measure. It’s called:

MENTAL HEALTH SERVICES FUNDING. TEMPORARY REALLOCATION. HELPS BALANCE STATE BUDGET.

Yeah, that’s unbiased….

I start the look at California’s ballot initiatives (the election is two weeks from today) with the last proposition on the ballot, Proposition 1F. I’ve decided to work backwards on these measures, from the least impactful to the most.

Proposition 1F’s official title is, “ELECTED OFFICIALS’ SALARIES. PREVENTS PAY INCREASES DURING BUDGET DEFICIT YEARS.” And this is one of the few measures on the ballot that does exactly what it says it will do.

But it’s what it doesn’t do that’s interesting. First, realize that California can’t have a budget deficit (the state is constitutionally required to have a balanced budget). What this measure does is prevent wage increases to elected officials when borrowing or other measures are used to “balance” the budget.

I don’t have a strong opinion on this measure. (I definitely do on some of the other ballot measures as you will see.) Proponents argue that it will help fix the dysfunction in Sacramento. Opponents state that it will really do nothing, and that it will actually harm some innocent bystanders.

No matter where you stand, remember to vote on May 19th.

Jerry Houseman, a member of the Sacramento City School Board. Here’s what he recently said of those of us who are against tax increases:

He thinks that people who don’t want tax increases are against public education and funding of police and fire departments.

I’m for those things.

What I’m against is the duplicative waste and bureaucracy in Sacramento; spending that has increased far faster than the rate of inflation over the last twenty years (even when you include the impact of population growth); and a mindset that the solution is never to cut programs but to always increase taxes.

Mr. Houseman vented against the Tea Party movement. Like all Americans, he’s entitled to his opinion. I’d suggest that he also consider our Founding Fathers and their version of an America with limited government. Indeed, the 10th Amendment notes that many powers vest with the people.

The Tea Party movement could lead us toward a shrinkage of government. Unlike Mr. Houseman I think that would be a very good thing.

It’s time for a Captain Louis Renault Award (thank you, Hot Air, for the idea).

The United States is suffering a recession. California’s legislative leaders not only had a bad budget back in February, they had relatively rosy projections of revenues.

What happens when tax rates go up? Tax collections go down. Add in a recession, and it’s no surprise that we’re looking at an $8 billion deficit projection. That could be $14 billion if budget propositions A-F (on the May 19th ballot) fail. I’ll begin posting on these propositions tomorrow.

Nationally syndicated columnist George Will called Governor Schwarzenegger the best thing for neighboring states. I’m not sure I’d go that far, but I do think we’re going to see a lot of nastiness in Sacramento in June.

I’ve been saying the same thing for months (soon to be years): California must drastically cut spending. A lot of the boards and regulatory agencies that are also found in the federal government need to be eliminated. Government can’t be everything for everyone (nor should it be). It may well be that California will be forced down this path, though given the state legislature I think it will take the voters imposing their will in order for this to occur.