This is better than what we’ve seen before. From the SacBee:
Senate President Pro Tem Darrell Steinberg called for using much of the state’s proposed $4.5 billion budget reserve next year to save key health, welfare and college scholarship programs.
“The purpose of a rainy-day fund is to provide funds for a rainy day,” Steinberg said at a news conference. “It’s thunder and lightning in California right now.”
Specifically, Steinberg proposed using reserves as an alternative to Gov. Arnold Schwarzenegger’s proposals to eliminate the state’s CalWORKs and Healthy Families programs and to end future Cal Grant awards.
Steinberg also proposes to not raid local governments, which is a very, very good move for him – not only is it bad policy but it’s bad politics, for it could do more than any other move to undermine Democratic efforts to win new seats in 2010. Steinberg also signaled openness to repealing the corporate tax giveaways in the September 2008 and February 2009 budget deals:
To help make up the difference between the two plans, Steinberg would tap $3.5 billion to $4 billion of a proposed $4.5 billion reserve.
If bolstering the reserve fund is necessary, Steinberg suggested revoking various corporate tax breaks approved as part of past budget negotiations.
This is much weaker language than is necessary – Steinberg ought to attack the tax breaks outright. Zed Hollingsworth predictably defended those tax giveaways in the article, but he is WAY out on a limb by doing so. Nobody in this state things those tax breaks are worth making the deeper cuts needed to offset their cost, and the notion that California needs a rainy day fund in the middle of a hurricane was soundly rejected on May 19.
Steinberg and Bass also ought to be proposing other tax increases. Arnold Schwarzenegger has opened the door to an oil severance tax by his framing of the Tranquillon Ridge offshore oil project as necessary for the budget, and the Binder poll laid out other taxes, including higher income taxes on the wealthy, that the public not only supports but wants.
So while I am pleased to see better stuff coming out of the Democratic leadership, it’s not as strong as it needs to be. Democrats have to stop pre-compromising. Come out swinging with bold and progressive proposals. And if they have to move toward the middle, at least it would be a genuine middle, instead of the right-wing “middle” that has dominated the last few budget cycles.
Tax Fairness!
I think it’s imperative that we keep attacking the massive tax cuts for multi-national corporations, continue to insist on an oil extraction tax, demand a reinstatement of a California estate tax that is deductible against federal income taxes and push for fair taxes on property.
Why should very large corporations get billions in tax cuts while small businesses are closing? Why is California the only major oil-producing state that lets the oil companies skate? Why should California be the only state that sends all its estate tax to Washington instead of keeping some here? Why does a billionaire like Donald Bren pay a much smaller percentage tax on the headquarters of the Irvine Company than a struggling two-income family with a condo in Aliso Viejo?
The fact is is that there are no votes for new taxes.
You will not see the democrats propose anything because they can offer republicans nothing in return. Until reapportionment in 2010, no republicans know where their districts will be, so they will not do anything to put their neck out. Democrats will also not implement spending cuts until forced to do so by Wall Street.
Looking at taxes, it makes sense.
The individual rates cannot go higher and still have a demand for california bonds – enough of the wealthy will just leave and not buy bonds. The rate went up to 10.55%, hardly a “progressive” raise by our legislature, but even progressives have to face reality.
corporate rates will not go up as the corporations have purchased the state legislature.
Sales taxes should probably go much higher – it is where the money is and there are no special interests that fight against it, not on the left or the right, but even democrats like bass and steinberg realize just how regressive the tax is – at 9 plus percent in certain counties, it makes a mockery of progressive taxation as it is mainly the poor who suffer the bite.
The estate tax is never coming back.
Face it, taxes in California are too high right now, but bearable – the last increase, which was so regressive it would made right wingers guffaw – was the last chance.
The democrats have to worry about potential loss of seats in open primaries and are not going to mess with their success in retaining their seats.
There are going to be healthy cuts, and i think lots of illegals will leave.
If the Democrats put out a responsible plan and the Republicans won’t vote for it, leave it there on the table. Let the State run out of money so the public can see what the Republicans are proposing. The Republicans have made this a game of chicken. Its time the Democrats stop backing down.
A responsible plan can include taxes, higher rates on upper incomes (if the rich want to leave because they don’t want to pay their share of the tax burden, let them go) Oil extraction taxes would be popular because they would hit the bloodsuckers that are running up the gas prices. Corporations need to pay more. Lets return to the rates that were in effect under Reagan. Let’s hire more auditors. Do you realize that there are only six auditors monitoring the States Unemployment Compensation tax collection. No wonder the system is near collapse. There are many other ways that the State can raise money without resorting to regressive measures. It will take creativity and a spine.
Awhile back, I contacted him through his website emphasizing that my family, friends and I all voted no on 1A – 1F because we oppose the spending cap and want him to pursue new revenue. I received his reply today:
“Thank you for taking the time to share your concerns about California’s budget deficit.
We heard the voters loud and clear in the May 19 special election. Voters are facing tough times – job losses, home foreclosures, and are financially in a world of hurt. Incomes have taken a big hit. As a result, people’s tax bills were lower this year. That means the state has much less cash than we anticipated.
We will immediately start working to make the cuts necessary to bring our already enacted 2009-10 state budget back into balance before the beginning of the fiscal year on July 1. Every day we delay means deeper cuts will be necessary. We will do the very best job we can to provide the most essential state services with the money we have available.
I appreciate the time you took to share your views with me and hope you will continue to keep me informed of your opinions. Please feel free to call my District Office at 651-1529 if you have any more questions or concerns.”
Steinberg couldn’t do worse if the GOB was scripting his plays. Steinberg has no clue, he should have resigned in shame long ago.
Remember that he pushed through a bill this past February to impose an additional expense of roughly $25 million per year on the citizens of Los Angeles County. (Note: Steinberg lives nowhere near LA.) He did this to give the judges of Los Angeles County an extra $46,000 per judge in county funds, which they had been collecting, under the table, for years.
What a slime he is.
This is the same Senator who told us to let him know which school districts weren’t using their reserves to retain staff, and he promised a stern letter to those districts.
Well, I calculated the excess reserves of my districts who were sitting on them, districts that laid off dozens of essential school employees. I got no letter yet. And now we shouldn’t worry about additional education cuts because of the stimulus funds?
The County offices of Ed are telling districts not to rely on “one time money,” and they’re listening to them. Despite the federal funds allocated, we’re still getting cut.
I feel stabbed in the back, having Democrats advocate for further cuts to schools.
since you all are uninformed, i will inform you.
California had an estate tax, it was equal to the amount of the federal credit for state estate taxes. THAT IS IT. NO FEDERAL CREDIT, NO CALIFORNIA TAX. Any other inheritance tax is contrary to the law, and would require a 2/3 vote.
For instance, you died with $10 million bucks, and your federal estate tax was $4 million, the feds offered a state death tax credit of $500,000 (there was a percentage that figured this, but i forget).
So, if CA imposed an estate tax equal to the amount of the credit, you paid CA $500,000 and you only owed 3.5 million to the feds.
As part of the estate tax changes in I think 2001 or 2003, the feds decided to phase out the estate tax credit for state death taxes. So, if your state imposed a tax equal to the credit (this is known as a “pick up” tax as it picked up the credit), the state no longer had an estate tax.
New york has a separate inheritance tax – California does not. California should not, there is no reason that so many services need to be offered by california. Cut off any aid to anyone near the middle class who can work.
I just clicked through to the comments because they listed one new, only none of them were flagged as new. And looking through manually, none were new. And then I counted comments, and there were 18, but the counter said 21. Is this a bug, or do I have to click something to expand threads beyond a certain length, or what?