Suppose an acquaintance invites you to lunch. You meet him in front of the restaurant where he announces that he is a little strapped for cash. Turns out he can’t host lunch, but he will split the bill with you. You feel uncomfortable because you are on a brown bag budget, but nevertheless agree.
During lunch, he does most of the talking. It is clear he is trying to impress you. When the bill arrives it amounts to $26. Your companion takes out his wallet and stares intently at its contents for a few moments, before mumbling he has only $8. This is unsettling because you barely have enough money for half the bill. At this point he excuses himself to use the restroom. As you observe him, he crosses the room passes the restroom door and darts out an exit. That’s when the realization hits you that you will be spending the afternoon washing dishes.
You’ve just had lunch with Jerry Brown.
In announcing his budget, the governor emphasized he will close a $26 billion shortfall through “shared sacrifice,” half tax hikes and half spending cuts. He has followed this up with a public relations campaign telling anyone who will listen that it is up to the Republicans in the Legislature to match his proposed cuts by agreeing to place increases in the income, sales and car taxes on the ballot for voter approval. At the same time, he has made some symbolic gestures at economizing, like cutting the number of cell phones provided state workers, but no cuts of real consequence. Still this has been enough to convince editorial writers at some of the state’s largest newspapers to join him in criticizing Republican lawmakers who see increasing taxes in an already high-tax state as bad policy for both taxpayers and the economy.
But let’s look at the governor’s end of this proposed “deal.” The actual cuts turn out to be much less than half the deficit. After removing some items the governor places in the “cuts” column that are actually transfers between accounts — like taking money from the First Five program funded by the tobacco tax — the actual spending reductions start looking like $8 billion, which clearly is much less than half the total “bill.” As further evidence that the proposed spending reductions are a charade, Brown’s allies in the Legislature, the Democratic majority, have made no move to approve even modest cuts. Worse yet, if he were to spur them to action, special interests are lining up to file suit to restore cuts to their programs. (All one has to do is look back to 2009 at the twenty lawsuits that were filed in response to Gov. Schwarzenegger’s furloughing of state employees, to understand the scope of the problem.)
Brown wants to end enterprise zones as a budget savings and already a lawyer representing an enterprise zone coalition has stated that not only will they litigate but they will make sure the state will not see a penny of this money. Backers of other programs are no less determined. The League of California Cities, a certain litigant if Brown follows through on pledge to close down redevelopment agencies that soak up money that would otherwise go to schools, has already begun an expensive statewide media campaign in defense of these programs that are a favorite of local officials.
If new taxes were to be approved, most of the promised cuts could be held up on the courts for years. So while the tax increases would be real, the spending cuts would be illusory.
Taxpayers should be grateful that Republican lawmakers continue to hold the line against higher taxes, because, as the saying goes, “There is no such thing as a free lunch,” and the governor’s wallet is empty.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.