Welcome to the November Money issue of NorthBay biz. Is it unreasonable to expect our representatives to do what every other California family is being forced to do—live within its means? I don’t think so. I believe it’s time to cease asking the California legislature to stop its ever-growing profligate spending. It’s time to demand it. In fact, let’s take a page out of the radical environmentalist’s playbook and insist it roll back statewide spending levels to those of a decade ago. That’s right, demand the state cut the budget by $30 billion to approximately 1999 outlays. As a start, maybe we can roll back the $12.5 billion in new taxes that took effect just this year—and return the money to all the California families in desperate need of it.
The supremely arrogant and out-of-touch legislators in Sacramento, endowed with superiority complexes that know no equal, believe they know what’s best for all the citizens (serfs) they represent. In their minds, they weren’t elected to serve the people’s will—they were ordained to enact their political party’s progressive vision of what’s best for the proletariat, because the “little people” aren’t smart enough to know what’s in their own best interests. And it matters not one whit to them that their approval rating is at an all-time low of 12 percent. They—or people just like them—will be reelected anyway, thanks to the gerrymandering of districts that both political parties were complicit in creating. So they blithely go on dismantling and destroying the foundations that made this state great in the name of “We know what’s best.”
Instead of raising taxes to support out-of-control spending, the legislature should make job creation its number one overriding priority. Consider: California’s unemployment rate is 12.2 percent—approaching three times what it was in December 2007; California is ranked 49th in a survey of states least friendly to new business; California’s economy has fallen from the fifth to the eighth largest world’s economy; California is the sixth most expensive state to do business in; California now has the worst credit rating of all 50 states. Sadly, this list could go on and on.
And despite endemic multi-billion dollar budget deficits and a reeling economy that have produced this record unemployment, the legislature still serves special interests before its other constituents. For example: A single government employee union (are you ready for this?) is proposing 31 new taxes on consumers and businesses that would generate more than $80 billion over the next two years if adopted. How else can government continue to grow union ranks to perpetuate and expand the neat little scam it has going? You know the one I’m talking about—unions contribute millions in membership dues to the politicians and, in return, these same elected officials increase wages, benefits and bestow early retirement boons on union employees. And here’s the best part: It’s all done with taxpayer monies. What a sweet deal! Who said a perpetual motion machine was impossible? This mechanism seems pretty close to me.
Since Sacramento refuses to stop spending money it doesn’t have, expect attempts to increase taxes on consumer goods. And in concert with those efforts, expect the legislature to start taxing business services too. Our lawmakers seem oblivious to the repercussions of continuing on this path of ruin. Taxing more goods and services hurts everyone no matter the timing, but given our present economic circumstance, it’s madness. People can’t pay for food or rent as it is. None of that matters to the insatiable blowholes in power in Sacramento, however. Their mantra remains, “If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.”
The disenchantment with our full-speed ahead, damn the torpedoes, business as usual, keep spending, lawmaking crowd is growing. The number of Californians who think our state is one of the best places to live has dropped from 76 percent to 40 percent. Significantly, California voters now support lower taxes and fewer services as opposed to vice-versa by a 49 to 42 percent margin. There’s a new study out from researchers at California State University Sacramento that’s being pooh-poohed and marginalized by politicians—with help from the press—that states the stifling regulations that have been imposed upon businesses here are costing the state almost 4 million jobs. Imagine the difference 4 million jobs would make in the current California economy. Imagine how much more money the state would be taking in if the tax base were expanded by 4 million people and from companies at which these folks would work. However, in the near future, the regulatory environment only promises to get worse.
In a final note, just slightly off topic, how’s this to epitomize, “when less is more?” It seems Santa Rosa residents are to be commended for not only complying with—but also exceeding—the city’s request to conserve water over the past couple of years. In fact, we’ve been so successful that the Sonoma County Water Agency‘s water sales fell 2 billion gallons short of projections. Naturally then, the fees collected for water use were less. Now here’s the rub. Apparently, the fees collected fell short of the county’s fixed costs, so as a reward for everyone’s conservation efforts, water rates will increase 8 percent in 2010 and another 8 percent in 2011. Pretty good motivation to cooperate with future calls for conservation, isn’t it?
That’s it for now. Enjoy this month’s magazine.
