One of the great delusions in California is the idea that if only the government had more power and money, we might finally solve the problems faced by Californians.
Even before the pandemic, Californians were faced with an onslaught of calls for additional taxes.
Just last year, the California Legislature proposed over $20 billion in tax and fee increases, according to the California Taxpayers Association.
Just this past March, Californians were presented with 236 local tax and bond measures, plus a statewide school bond.
An original version of the split roll property tax measure on this November’s ballot had already qualified in 2018. That measure seeks to raise up to $12.5 billion in revenue per year from commercial and industrial properties.
Again, this was all pre-pandemic, in the context of an economic expansion in which state and local governments were already enjoying ongoing revenue gains.
In 2015-16, for example, California state government had a general fund budget of $115 billion. The 2019-20 general fund budget was $147.8 billion.
Evidently, not even gains like that were enough to pacify lawmakers and special interest groups perpetually agitating for more money.
California’s problems with widespread poverty, the housing crisis, the mediocre state of the K-12 system, all endured.
The reasons why aren’t difficult or profound: All of these problems are the predictable consequence of abysmal government policymaking and no amount of taxing-and-spending will solve them.
Want less poverty? Then let the free market work. There’s no better cure for poverty than economic prosperity.
Want to make housing more affordable? Then make it easier for housing to be built, strike down land-use restrictions and stop piling on mandates.
Want to improve the K-12 system? Then stop letting the teachers unions suffocate school choice, make it easier to remove underperforming teachers and ensure education spending is actually benefiting students first and foremost.
But this is lost on most lawmakers in Sacramento and those who perpetually agitate for more government, who think every problem requires a new government program to solve and have never stopped to consider that maybe existing resources can be better utilized.
Since the pandemic, this trend has only gotten worse.
More of the same
While failed, costly projects like the high-speed rail debacle drag on, and while talk of pension reform remains verboten, lawmakers have been busy promoting new tax increases.
Assemblyman Kansen Chu, D-San Jose, decided to gut and amend Assembly Bill 398 to propose a $275-per-employee tax on businesses with 500 or more employees. Evidently, it didn’t occur to Chu that this is the absolute worst time to tax companies for daring to employ people.
There’s Assembly Bill 1253, introduced by Assemblyman Miguel Santiago, D-Los Angeles, which would increase the top state income tax rate to as much as 16.8 percent. Not long after, Assemblyman Rob Bonta, D-Oakland, proposed a wealth tax to confiscate $7.5 billion per year.
The messaging is all-too-familiar. There’s always a need to “invest” more. So-and-so is not paying their “fair share.”
Among those supporting massive tax increases in California is a coalition of advocacy groups and public-sector unions formed under the banner of Commit to Equity to call on the Legislature to “invest in our communities of color and vulnerable people to build a more just, equal, and inclusive society.”
The idea that raising taxes so government has more money to spend will necessarily lend itself to “a more just, equal, and inclusive society” is … highly suspect idea, to say the least.
This requires either a very romantic, or perhaps the word is naive, view of what government actually is and how it works.
Let’s be clear: Even before the pandemic, as California state and local governments boasted massive gains in revenue, there were still calls for tens of billions of dollars in tax increases at all levels of government.
Now, on top of that, at a time when what California needs is a strong economic comeback, there’s a push for tens of billions in even more tax increases, supposedly in the name of justice, equality and inclusiveness through some magical mechanism.
Supporters of tax increases in California invoke broad claims to justify money grabs that will ultimately be squandered by politicians who have already shown a knack for blowing money in good times.
There’s no magic to California government. Additional money from tax increases from a split roll property tax will ultimately go to papering over pension costs. Additional taxes to the state’s general fund will certainly not produce a more just, equal and inclusive society, but it will allow state lawmakers to punt on undertaking any serious reforms of state government or state spending.
Teachers unions and misallocated resources
Just to take one example of the mismatch between the grandiose rhetoric of tax hike supporters and reality: It’s terribly ironic that the California Teachers Association and the California Federation of Teachers would call out systemic inequality when they play a dominant role in California’s K-12 education system, a system so broken that poor kids of all ethnic backgrounds, but especially Black and Brown kids, are consistently lagging on virtually every metric.
While CTA and the CFT have been busy for years advocating for restrictions on charter schools and opposing systemic changes, what they really don’t want anyone to do is note the simple fact that pensions alone are eating into greater and greater proportions of California school budgets.
Consider this: in 2001-02, the Los Angeles Unified School District spent just 3.7 percent of its budget on pensions. By 2011-12, it was spending 10 percent on pensions. By the end of this decade, the district has projected it will spend 22.4 percent of its budget on pensions. When combined with how much it expects to spend on health benefits, the district was projecting in 2017 that by 2031 it would be spending most of its budget on pensions and health benefits.
Naturally, most people look at those figures and know something is seriously wrong when education budgets shift increasingly toward public employees benefits instead of benefiting students.
That’s why CTA and CFT have backed tax hikes for years. Now they have new progressive-sounding rhetoric to hide behind, while pretending to care about systemic inequality that they themselves have contributed to.
Parting thoughts
In California, we have a one-party state dominated by self-interested public-sector unions, true believers in the glory of big government and incompetent politicians who prefer to go on grand crusades against things like plastic straws.Confiscating more money from taxpayers to give to such a system won’t make California a more just, equal and inclusive society.
It’ll go right into the money pit of Sacramento and City Hall and right in the coffers of public-sector unions that always want more. And it’ll all come at the expense of economic growth, while aggravating California’s cost of living and enabling politicians to focus on pipe dreams instead of the basics.
California’s government needs to look in the mirror, prioritize for a change and more often than not, curtail, not expand government and public-sector union power.
By doing that, California can ensure the strongest economic recovery possible, finally see real progress in its perpetual crises, lift more Californians out of poverty and thereby correct systemic injustices that too often are the product of, or worsened by, misuse of government power in the first place.
Sal Rodriguez is the opinion editor of the Southern California News Group. He can be reached at salrodriguez@scng.com
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