Your eyes on California Government

AUG. 22, 2011

By JOHN SEILER

Politicians are like generals. They probe for weaknesses. When they find one, they push their troops through.

That’s happening with taxes in California. Gov. Jerry Brown’s attempts to extend Gov. Arnold Schwarzenegger’s tax increases failed earlier this year.

So probes are being made by others for different tax increases. The latest probe is for a split-roll property tax. It would keep property-tax levels where they are on homes, but allow unlimited tax increases on business property. It would play to envy in a time of deep recession and high unemployment. Only the “rich” supposedly would pay the tax, the rhetoric goes, finally having to pay “their fair share for all the benefits they get from living in California.”

Last week Los Angeles Mayor Antonio Villaraigosa’s kicked off a new probe for the split-roll tax in a speech before the Sacramento Press Club. As my colleague Steven Greenhut wrote in his column today, ”The big news is that he touched the third rail of California politics by calling for an end to the protections given owners of commercial property by 1978′s property-tax-limiting Proposition 13.”

Gov. Jerry Brown opposed the tax increase. He remembers how he first opposed Prop. 13 in 1978. Then, after it passed in the June election that year, he embraced it and rode it to a re-election victory in November.

Hot on Villaraigosa’s heels came the barking hounds of tax increases, Times columnists Steve Lopez and George Skelton.

Lopez’s column was titled, “Villaraigosa talks financial sense; now it’s Brown’s turn.” Lopez brought up cuts at his daughter’s public school and in mental health funding. He wrote, “The gap between haves and have-nots is a canyon, and shrinking the government down to nothing will hurt those who need help the most.

“I keep wondering when more people in California’s Central Valley, the Inland Empire and the Imperial Valley will realize that their budget-shrinking GOP representatives are destroying their children’s schools, driving up college fees, crippling public safety, closing parks and libraries and making it harder to see a doctor.”

Pensions Slighted

But he mentioned only in passing the metastasizing drain on state and local treasuries, public-employee pensions.

He didn’t mention the immense waste in government that has been detailed by his own newspaper, such as the $5.7 billion bond for the L.A. Community Colleges.

He didn’t point out that, although his children’s school seems to be a good one, the high-school graduation rate in the Los Angeles Unified School District is only 41 percent, second worst in the country after Detroit. That occurs even thought he LAUSD spends a whopping $30,000 per student.

And he didn’t point out that mental-health funding also is generous, and even has its own dedicated funding source. Proposition 63, which voters passed in 2004, dedicates a special tax on millionaires to fund mental-health care.

Apparently, whenever the government messes up and miscalculates state pension liabilities to the tune of $500 billion, or refuses to cut bloated school administrative costs and improve teaching — taxpayer’s are just supposed to go along with it and shout, “Taxes, please! May we have some more!”

Lopez continued, “Another big-ticket proposal by Villaraigosa is that we should lower the sales tax but apply it more broadly, including to some services that aren’t covered now. As the mayor put it, why do we tax doughnuts but not lawyers?”

Actually, we don’t “tax donuts.” If you buy them in a grocery store, then there’s no sales tax because food isn’t taxed. You only pay a tax on donuts if you sit down and eat one at a donut shop — that is, if a service is provided.

Lopez also attacks Assembly Republican Leader Connie Conway for opposing tax increases, which supposedly led to cuts in crucial programs in her home territory, Tulare County. He says she and other Republican anti-taxers “blew a chance at pension reform and hurt many of their own constituents in the long run.

But when Gov Arnold Schwarzenegger raised taxes $13 billion in 2009 to close the budget gap, it did nothing of the kind. The gap remained. And the state economy got even worse as businesses kept fleeing for better tax-and-regulation climes.

Lopez, like Skelton and Villaraigosa, believes that if you raise tax rates, you actually will get the tax revenue. But that doesn’t always happen if taxes become so onerous people and businesses migrate, or just stop working and go on the dole.

Moreover, the pension reform offered by Gov. Brown and the Democratic leadership in the Legislature was minor.

Skelton’s Taxin’ Blues

George Skelton sang a similar tune. His column’s title was almost the same as Lopez’s, “Villaraigosa’s bold jabs at Brown and property tax.”

Skelton wrote, ” ‘I want to give him cover to be as great as his dad,’ the mayor told Times reporters, referring to Gov. Pat Brown, the legendary builder of public works. ‘This is about being bold again’.”

But, for the General Fund, Pat Brown spent 4.07 percent of per-capita personal income in his last full budget, 1965-66. By comparison, Jerry Brown in his new budget for 2011-12 is spending about 5.18 percent of personal income. That’s an increase of 27 percent.

For total spending, which adds Special Funds and Bond Funds to the General Fund amounts, Pat Brown spent 6.40 percent of personal income in 1965-66. But Jerry Brown spent 7.73 percent for 2011-12. That’s an increase of 21 percent.

And in 1965-66, state employees numbered 8.2 out of 1,000 population. Today, it’s 9.0 out of 1,000 population. That’s an increase of 10 percent.

The data come from Gov. Jerry Brown’s budget proposal for 2011-12, Schedule 6, Appendix Page 12.

Apparently, neither Villaraigosa, nor his speechwriters nor Skelton checked the actual numbers.

Skelton wrote, “It’s inconceivable that after 33 years, Prop. 13 — any law — can’t be tweaked and updated.”

Actually, Prop. 13 has been “tweaked and updated”:

* In 1996, voters passed Proposition 218, which required a vote of property owners before their taxes were increased.

* In 2000, voters passed Proposition 39, dropping to 55 percent from two-thirds the threshold for passing local school bonds.

* In 2010, another Proposition 13 extended the original Prop. 13′s property-tax protections to seismic retrofitting.

Skelton has been writing on California politics for decades. Doesn’t he remember?

Even as the state and national economies fall into another slump, we can expect these tax-increase probes to continue. Tax obsessives are like an alcoholic who “cures” his morning hangover with “a hair of the dog that bit you.”

Meanwhile, the ghost of Howard Jarvis (pictured at right) is shouting, “I’m mad as hell and I’m not going to take it anymore!”

Tags: Antonio Villaraigosa, George Skelton, Howard Jarvis, John Seiler, Proposition 13, Steve Lopez