Dan Walters: A high-risk scenario on tax hike

Sacramento Bee ^ | 10/10/10 | Dan Walters

[SmithL]

It took nine months for the Capitol's politicians to gestate a state budget, and it's a progeny that even a mother wouldn't love.

Like others of recent vintage, it's "balanced" with pie-in-the-sky revenue assumptions, back-door borrowing and Enron-like accounting gimmicks.

Like its siblings, this budget is probably good for only a few months, just long enough for the state to float some short-term bank loans – and just long enough for Arnold Schwarzenegger, elected governor in 2003 on a pledge to end "crazy deficit spending," to leave town and dump the mess on his successor.

So what's the next stage? That depends largely on whether Democrat Jerry Brown or Republican Meg Whitman wins the governorship three weeks hence.

If it's Whitman, look forward to more protracted budget battles, especially since state revenues are likely to drop by about $10 billion a year as temporary tax increases expire and the economy continues to wallow in recession.

Brown would face the same fiscal problem and has pledged not to raise taxes without a popular vote – a safe promise since Republicans would block tax increases in the Legislature anyway.

The only way around that block would depend not only on Brown's election but passage of Proposition 25, reducing the legislative vote requirement for budgets from two-thirds to a simple majority.

[SmithL]

It is, in other words, a high-risk scenario, but may be the only pathway for Democrats to seek their holy grail of enacting big tax increases to shore up a deficit-ridden budget.

Fish gotta swim,

Birds, gotta fly, and

Rats gotta Tax!

[umgud]

The only way around that block would depend not only on Brown's election but passage of Proposition 25, reducing the legislative vote requirement for budgets from two-thirds to a simple majority.

They better pass Prop 19 also (leagalize MJ) so we can all get so stoned we won't notice the trainwreck from removing the 2/3rd requirement.

Our leaders are convinced they can solve all our problems if they could just find a way to get enough of our money.

[dennisw]

Definitely the way out is for California to legalize pot. Getting the population too zonked out to care how awful things are getting

[Neanderthal]

How is prop 25 polling?

[SES1066]

As we watch this train wreck (very slow motion) happening, I think that we are about to see if a state can survive without an entrepreneur class as I can not see anyone trying to start a business in this state as this goes on. This hollowing out process is, I think, unique in our history and will have immense implications.

California, since the end of WW2, has been the cornucopia of goodness and productiveness and has now eaten not only the golden eggs but taxed the goose into starvation. Now we are being looked to as a nation to help bail out these summer-time grasshoppers in a threatening winter!

[upcountryhorseman]

You can forget prop. 19, it is superceded by federal law!