By Sen. James Brulte
Senate Republican Leader
Sometimes dreams don’t come true.
Many in state government were hoping the state’s fiscal picture would improve by the time that Governor Davis released his “May Revision” to his state budget proposal. Sadly, their dream was more like a nightmare.
The centerpiece of the governor’s new budget proposal is a plan to borrow money to pay off the state’s $10.7 billion deficit. The governor would do this by raising the sales tax and directing the money into a new state agency that would pay off the debt in five to seven years.
It’s a bad idea on two fronts.
First, history shows that increasing taxes weakens the economy. The Board of Equalization the state agency that implements our tax laws conducted a study on increasing sales tax and what it would do to the economy. They found that raising the sales tax a quarter-cent would result in more than $900 million being taken out of the economy. Using this model, the governor’s proposal to increase the sales tax by one-half cent would take $1.8 billion out of California’s already-sluggish economy.
Second, a close look at the Governor’s proposal reveals that it creates an open-ended opportunity for deficit borrowing. Thanks to Proposition 13, tax increases in California require a two-thirds vote of the Legislature. But as it’s currently written, the Governor’s proposal would allow the Legislature to add more to the deficit and borrow more money to pay for it with a simple majority vote.
While I’m critical of many aspects of the governor’s latest budget, I don’t dismiss it out of hand.
There are parts of this revised budget that make sense and there are parts that don’t. My Republican colleagues and I want to craft a budget that can be enacted on-time with broad bi-partisan support.
Back in January, Senate Republicans voted to adopt most of the spending reductions that the Governor proposed in his initial budget plan. Although the Senate’s Democrats blocked these reductions, we again stand ready to make the tough but necessary votes to bring state spending under control.
June 15th is the deadline by which the Legislature is supposed to pass a budget, and more than ever, it’s critical that we get our work done on time. Despite our differences, we need to lower the rhetoric and jointly develop responsible solutions. And we need to get to work now.
I have told the Governor and the Democrat leaders in the Legislature that my Republican colleagues and I are willing to negotiate on virtually every aspect of the budget except one tax increases. First, it is fiscally and economically irresponsible to raise taxes when California’s economy is fragile. Additionally, California taxpayers shouldn’t be punished because of Sacramento’s failure to rein in state spending. It is for these reasons that Senate Republicans are opposed to tax increases.
Senator Brulte is the leader of the Republicans in the California State Senate. He represents the 31st Senate District, which includes the southwestern portion of San Bernardino County and the northwestern portion of Riverside County