As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Thursday, January 22, 2009

Shorter Yacht Party: We'll Raise Taxes If You Stop Funding Schools

Jim Sanders reports that tax increases are on the table for the Yacht Party, but only with additional long-sought concessions. This actually is a shift because taxes weren't even on the table before, but not much of one.

The GOP caucus realizes a tax hike will be part of any budget pact but could support it only if agreement were reached on permanent program cuts, a hard spending cap and other issues, lawmakers said.

"The reforms have to be there," said Assemblyman Anthony Adams, R-Hesperia.

"(We must be able) to tell constituents, 'Look, we had to raise taxes, we had to go forward, but we've fundamentally altered the way in which Sacramento is going to be budgeted – and we will not have these problems again because of it,'" Adams said.

Obviously the wavering from business groups who are frightened by the prospect of the state's looming insolvency is driving this. But let's take a look at what the Yacht Party wants as an exchange for their support on taxes, which would probably be regressive ones like sales tax hikes instead of the progressive tax solutions needed like eliminating loopholes for businesses and upping the top marginal rates on the wealthy.

They want a spending cap. They've wanted it for some time. In fact, it already EXISTS, and it has for 30 years. But the Yacht Party wants tighter restrictions. The CBP blog has provided a chart showing what they really want.

The chart shows how much state spending would have had to been cut in the past decade to comply with the kind of cap that Republicans have offered in the past.

Our analyses found that such a cap would have limited total state spending in 2008-09 to $39.7 billion below actual budgeted levels. The General Fund’s share of the necessary reductions would be $31.2 billion. What would it take to cut $31.2 billion out of the General Fund budget? Eliminating all General Fund support for higher education; the judiciary; child support services; health care services; resources - including fire protection; and environmental protection. Maybe that’s why the campaign to modify California’s original cap was led by then-Governor George Deukmejian, then California Chamber of Commerce president Kirk West, and then-California Taxpayers Association president Larry McCarthy.

So the price exacted for revenue increases is an end to basically every service California provides. At that point, who needs the revenue increases?

Of course, the Yacht Party would have to get voter approval for a spending cap, so it's a gamble for them. But this movement should not be confused with a serious desire to actually serve the needs of a struggling citizenry.

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