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Reason Foundation

Orange County Register

Not the Time for Tax Increases in California

State has many options for raising money besides tax increases

George Passantino
August 1, 2008

The skyrocketing costs of gas, food and basic necessities are seriously hurting hardworking families across the state. To get by, people are cutting costs wherever they can.

With this backdrop, it is virtually impossible to understand how some Sacramento politicians can even put forth their current proposals. Senate Democrats want $11 billion in tax increases, while Assembly Democrats "only" want $6 billion in tax increases to close the state's $15.2 billion budget deficit for the fiscal year that started July 1.

The state Senate's package would be the equivalent of a $300 tax increase for every man, woman and child in California. That's definitely not a recipe for improving the state's economic conditions or helping working families.

The mere fact that the Sacramento is considering tax increases instead of scouring for ways to cut costs shows how dysfunctional and out of touch government has become.

The state operates more than 300 boards and commissions - several with six-figure salaries for their politically appointed members. There are also several dozen agencies, departments and other bureaus that completely overlap one another. California has four different entities that collect taxes. Wouldn't a one-stop tax collector do the trick? What does the State Personnel Board do that the Department of Personnel Administration couldn't? Those two agencies actually spent years in lawsuits - suing each other, with taxpayer money.

In addition to the wasted personnel resources, California is sitting on gold mines of property resources that sit idly by. The state government owns one of the most scenic - and expensive - waterfront properties in all of California and could reap hundreds of millions from its sale. No, it isn't a public park that needs protecting. It's San Quentin Prison. Shouldn't the state at least consider selling the beautiful waterfront land overlooking the San Francisco Bay, moving the outdated prison to much cheaper real estate inland - where a modern prison could be built?

Sacramento should explain why tax increases are preferred to selling state-owned golf courses, the so-called MTV beach house in Malibu, parking garages, and high-value urban land like the Los Angeles Memorial Coliseum. There are also thousands of vacant acres surrounding existing state prisons and hospitals that could be put into productive private use, generating revenue for the state. This wouldn't even impact existing operations of those facilities because it is extra land that the state owns.

Most lawmakers would hopefully agree that selling unused property is a better deal than raising taxes or gutting public services. Still, virtually none of this underused property has been put on the market. In fact, in May a bill to sell the L.A. Coliseum and surrounding land was handily defeated, even as it was estimated that it could bring in as much as $400 million.

When a typical family faces a financial shortfall, they adjust their spending and adapt to their new situation, living this way until their situation improves. It is what we all call "kitchen-table economics."

Taxpayers deserve the same level of fiscal discipline from our elected representatives. But instead of making tough choices, lawmakers typically revert to accounting gimmicks, irresponsible borrowing, and, in this case, proposals for higher taxes to solve the problems that have amassed under their watch.

Even in good times, when revenue is flush, this represents bad governance. When economic conditions are tough, as they are now, it is downright irresponsible.


George Passantino is Senior Fellow


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