Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Wednesday, January 09, 2008

In the meantime, way out in California . . .

While we were all watching New Hampshire returns, Arnold Schwarzenegger was delivering his state of the state address in Sacramento. I actually watched it for once. And boy, legislators were less than interested in his speeching. Many were working at their desks. It was a very passive audience.

There is no big news here. We all know that the state is in financial straights to the tune of $14 billion *yes that is a B*. This will mean, he said, across the board cuts. So unfortunately, he couldn't talk about new programs or improvements. Of course, he didn't set priorities either. In short, the state of the state ain't good.

He is planning to raise home insurance rates in order to raise funds. This may trickle down to everyone, even renters. If my landlord's rates go up, my rent does too. In addition, considering the softening housing market, how would higher insurance rates affect people who area already having trouble making their mortgage payments?

According to the LA Times, he is also hoping to add surcharges to insurance policies for renters and homeowners to cover firefighting efforts. Well, guess what? I don't live in a fire zone like the folks who have built in forests. And I don't get a tax break for my rent either. So it seems sort of unfair to hit renters.

The big thing he wants to do is introduce an amendment that would automatically cap spending when tax revenues increased more slowly than average. When revenues were flush, it would put extra money aside in a holding account for future use.

I have mixed feelings about this. He is right that once the spending starts, it can't be stopped even if it runs out. This forces the state to take more loans. I know that we need to rein in state spending, but that would really mean a new state constitution in order to overhaul tax collection and budget allocation rules. The governor failed to set any spending priorities. I don't think you can just blanket stop spending on everything. What do my fellow citizens think?

1 comment:

The Law Talking Guy said...

Schwarzenegger is showing the limits of his education, experience, and intellect. When he took office, we had a $10b deficit during an economic downturn. He promised that we needed no new taxes, just "fiscal discipline." He urged us to pass (and we did) a "one-time" $15-billion bond measure that was for the deficit, NOT for capital expenditures as bonds should be.

What he SHOULD have done was recognize the instability of the CA tax system and proposed reforming the property tax and the income tax. He did neither. The same problems came back again the next time we had an economic downturn. He also continued the Davis and Wilson policies of building more and more prisons and paying more and more to the prison guard unions. All the post-2005 promises of health care reform will have to die too. In the end, after 4 years, all Arnie did was add more debt and solve none of the STRUCTURAL problems in California's budgeting system.

You can tell Arnie seems to think he's learned all he needs to know from his experience as a small businessman and a bodybuilder, or from his occasional talks with smarter people like Buffett or his wife. He's an intellectual lightweight, and consequently a policy lightweight. He hires a new consultant, like the right-wing Tom Campbell or the moderate Susan Kennedy, and waffles and meanders as a result.

So now, yes, we need to raise tax revenue. Period. No way around it. And nobody in either party has the balls to fix the property tax system or restructure the income tax. The fesult will be some sort of hare-brained one-off tax on foie gras or turkey wattles.