Would California be in better shape if former governors Arnold Schwarzenegger or Gray Davis, or former Assembly Speaker Willie Brown, were back in power? That’s an odd question given the fiscal mess that those politicians helped create, or at least were powerless to fix.
These politicos had their chance at the pinnacles of power, yet they blew it. Schwarzenegger was elected in a historic recall, yet he left the state in a more precarious position than when he assumed power. Davis and Brown were advocates for the big-spending, pro-public-sector-union policies that turned California’s government into a bloated mess. No one in the media would champion returning these former leaders to power. Yet the media are championing a new “Blueprint to Renew California” based on the yearlong work of a commission dominated by these and other has-been politicians.
The report, released Nov. 21 by the Think Long Committee for California, purports to provide out-of-the-box solutions. The committee is a who’s who of the California political establishment. Members include Davis and Willie Brown and included input from Schwarzenegger, Jerry Brown and Lt. Gov. Gavin Newsom. One won’t find many real reformers in the bunch.
The only thing sillier than expecting this group to fix what ails California is the big idea unveiled by the committee, which amounts to a $10 billion annual tax increase on California residents. After a year, the best it could do is come up with a plan based on the same failed ideas that are fashionable in the Capitol all the time — hiking taxes on ordinary Californians to spare the state bureaucracy the pain of the cutting knife.
That isn’t thinking long. It’s thinking small. The most dangerous idea is a proposal to place a sales tax on every service in the state except health care and education. That will mean the cost of living here will go up, as everything from haircuts to lawn services will carry an additional tax. Even if the tax starts small, it will grow, given the spending tendencies typical in this state’s governments. The plan would eliminate most income-tax deductions, not including the mortgage deduction and a few other exemptions.
Sales tax rates would drop slightly as would corporate tax rates. But virtually everyone would pay more in their overall tax bill. The committee plans to place two initiatives on the November 2012 ballot, backed by billionaire financier Nicolas Berggruen. He is the latest in a long line of wealthy folks who come up with “state saving” plans that end up taxing us more and rearranging the armchairs around the 1,000-pound gorillas in the living room.
The committee’s 23-page report also includes some detailed suggestions for improving the state government and reducing gridlock. Some of the ideas are OK as far as they go, but they rarely challenge establishment thinking. The report mentions the unsustainability of public-sector pensions, but offers the lamest solution: “We recommend that the governor, legislature and local government officials make it the highest priority to work with public employee unions to find ways to address the long-term costs of pensions and the unfunded liabilities that have already been built up.”
The committee proposes the creation of a “Citizens Council for Government Accountability,” a toothless good-government body with amorphous goals. There’s no call for reducing government or creating competitive pressures on the monopoly systems that provide state services so poorly. If this council is populated by the same type of folks who populate the Think Long Committee, we will find yet another arm of government devoted to higher taxes and bigger government. It also wants to shift more power to the Legislature by limiting citizen initiatives.
If this is thinking long, then I’d hate to see the group’s short-term proposals.