One Possible Solution for a Sustainable Budget

As anyone who hasn’t been living under a rock in this state probably knows by now, California politics are at an unsustainable impasse.  Californians support extending taxes to balance the budget, and in particular support making the ultra-wealthy pay their fair share.  On the other hand, when phrased generally, Californians prefer budget cuts to tax increases, but oppose any specific cuts to the budget that would make the slightest impact on the state’s fiscal health.  Additionally and more importantly, Californians don’t support a repeal of Proposition 13, which creates the need for a 2/3 supermajority in both chambers of the Legislature to actually raise taxes.

The California Republican Party, meanwhile, has just over the 1/3 in the Legislature to not only prevent revenue increases, but also to stop commonsense efforts by the Governor to place commonsense budgeting that include a mix of cuts and tax extensions on the ballot. Nor does the CRP have any incentive, electoral or otherwise, to compromise even an inch on the issue without a offering ridiculous and ever-growing list of demands in exchange for the hostage. Democrats in both the Executive and Legislative branches, whom Californians voted into office overwhelmingly against the national 2010 tide, have little power but to attempt to minimize the damage caused by unnecessary and devastating cuts.  And even if a combination of redistricting and GOP unpopularity were enough to deliver 2/3 of the Legislature to Democrats in both chambers, it is probable that just enough conservative Democrats afraid of Chamber of Commerce money could be found, to vote against their Party and continue the gridlocked status quo.

The only potential way out of this complicated mess is through an already over-powerful and deeply flawed initiative process.  But with voters unwilling to eliminate supermajority rules on revenue increases, real solutions seem to be few and far between. One potential solution offered by the folks at Calbuzz would be to offer a conditional all-cuts budget, forcing a “yes” vote for awful cuts and a “no” vote to deny them.  This is an interesting idea, but fraught with great risks and potential hurdles.

But another path of lesser resistance may lie open: one that takes the confirmed desires of Californians into account while providing a permanent and sustainable solution to the budget crisis.

The solution would involve keeping the 2/3 requirement for revenue increases on all households falling below a certain prescribed income level, while moving to a simple majority vote on revenues for corporate entities (with possible small business exemptions), and all households with incomes above that level.  The level itself could be open to debate but due to high cost of living in California, should probably fall on the higher end (say, around $250,000 to $300,000 per annum.)  Such an initiative should be free of significant legal challenge, as the California Court of Appeals already ruled the “Millionaire Tax” Proposition 63 to be constitutional, and not a violation of the equal protection rights of the ultra-wealthy.

Californians like the idea of raising taxes on the rich and on corporations, as a way not only to balance the budget but also mitigate the growing income inequality so damaging to the fabric of society.  But they don’t want to see taxes raised on themselves, as they already feel nickel-and-dimed in most aspects of their lives, even as basic cost of living continues to rise.  Further, any politician seeking to implement regressive taxation in a state where the bottom quintiles already pay a greater share of their incomes than the top 1% as is should probably have their head (or heart) examined.  The answer to both California’s budget crisis and to feckless Democrats’ political woes lies neither in regressive taxation nor in continual “compromise” with those who value the well-being of John Galt over those of the sick, the elderly, the destitute and the middle class, but rather in a sustainable economic system in which investments are made in the future with equitable contributions from all levels of society, particularly those who have been most fortunate and demand the most in externalized costs from society to support their lifestyles.

A ballot initiative specifically designed to leverage Californian’s basic economic populist sentiments should have the power not only to be successful at the ballot box, but also to permanently end the legislative gridlock in Sacramento in a way that reflects the actual values of the people of California.

11 thoughts on “One Possible Solution for a Sustainable Budget”

  1. Should apply to Mobile Home Park Owners and Apartment Owners, As a lot of Seniors, Low Income and Disabled People live in these types of housing. We need these owners support and more importantly, Their Tenants too. Otherwise I agree with the premise as stated above.

  2. Very fine idea. Needs to be packaged as sound-bites. To accomplish that, make the 2/3 extremely specific:

    A 2/3 majority vote of both Houses is required for increases in personal income taxes above $250,000 in Adjusted Gross Income. A 50% majority required for any other tax increases.

    In plain language: 2/3 vote required to increase personal taxes on those who make more than $250,000 per year, and a majority vote for all other taxes (I know, not exactly the same, but need to have sound bites).

    Need to be careful with exemptions, because then every special interest wants one too, and opens the measure to attack. That’s why I support an extremely targeted measure like this, with no exceptions.

    Kudos to David Atkins for going beyond the standard online complaining to finding a plausible solution.

  3. But then… we’re up against an army of right-wing zombies. Zombies with truckloads of money to spend on influencing elections. Here they come, staggering down the street, the words “Tax cuts… TAX CUTS!” croaking from their dead withered throats.

    Into the back seat, Principles! Governor Brown is gonna drive!

  4. I’m not really in favor of 2/3rds(67%) or 51%, But 3/5ths(60%) which would be a good compromise, It’s high enough to do the job and yet low enough to not always get in the way.

  5. “all households falling below a certain prescribed income level”

    This is how SS was set up for demagoguery.  Cutoff should be some moveable number, i.e., anything over 150% of median.  Same for defining ‘small business’, since it’s well-known how that gets gamed.

  6. “Californians like theidea of raising taxes on the rich and on corporations”

    Californians like a lot of stupid things which is why we are in the budget mess we are in.

    I like schools, I like parks, I like locking up criminals, I like fast trains, I like environmental quality, I like lots of expensive things and I like that I get to make other people pay for them.

    Ain’t California grand?

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