This article is part of a PRO/CON opinion piece on Governor Jerry Brown’s tax extensions. To view the opposing side, see here.
By Diane Lee
Staff Writer
California’s economy hit bottom in 2008 during the worldwide economic recession and has remained there for three years under faulty financial plans. The new governor, Jerry Brown, proposed a promising state budget on Jan. 10, just a week after his inauguration.
Brown’s plan focuses on steadily reviving California’s economy, making necessary cuts and keeping essential taxes to erase the $25.4 billion deficit he inherited.
The budget proposal is a welcome improvement over previous fiscal policies. The balance of budget cuts and tax extensions is admirable and produces the best solution for California’s fiscal crisis.
Brown’s proposal will, among other things, keep the tax increases imposed in 2009, which increased sales tax, income tax and vehicle registration fees, for five more years to provide the additional $12 billion needed to fill up the deficit.
These tax extensions are set to expire at the end of July. Brown, however, plans to hold a special election in June for Californians to decide whether to keep the taxes or not.
To have the election, Brown needs two Republican votes in the State Assembly and another two in the Senate. In opposition to Brown’s budget, many Republicans formed a group called the Taxpayers’ Caucus and stated that they will never agree to the tax extensions.
However, the caucus has not offered any viable solutions to the budget problem. The group has only opposed taxes, offered cuts that will not make up the deficit and rejected all alternate proposals.
Because the group has yet to formulate any solution of its own, it must step aside and allow the voters to decide whether to extend taxes in order to improve the state’s financial situation.
Californians should vote in favor of the tax-extensions if the measure ends up at the ballot. Brown has stated that extensive budget cuts will follow if the extension fails. The proposed mix of cuts and taxes will ensure the state has ample funds and that the residents are not over-taxed.
Brown’s proposal will already deal a hard blow to many state programs. For example, UC and CSU will lose $500 million each, and Medi-Cal will lose $1.7 billion. Without the tax extensions, the state will have to cut $12 billion more, which will be a devastating blow to the economy.
The governor’s budget benefits K-12 education by not making additional cuts to school district funding. Instead, the budget will retain current education costs and focus the cuts on more appropriate areas of the state budget.
Another favorable part of the plan is the decentralization of spending responsibilities in Sacramento. Brown plans to give some of the tax revenue to individual city and county governments so they can carry out some tasks that the state government usually handled. Taking care of tasks at a local level will improve efficiency, save money, and give more power to local governments.
Brown’s state budget proposal is realistic, sensible and gives practical solutions to the state’s problems. The equitable division of taxes and budget cuts and the shift of power to the local level will be a fundamentally sound foundation for a financially stable economy.
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