Posts Tagged ‘Tax increases vs. extensions’

Brown Works Inside Sac; No Budget Bully Pulpit Yet

Wednesday, February 9th, 2011

You might think that Gov. Jerry Brown’s appearance tomorrow evening at a dinner hosted by the Los Angeles Area Chamber of Commerce will mark the launch of Krusty’s “outside” campaign for his proposal to put $12 billion in tax and fee extensions on the June ballot. But you’d be wrong.

Although his State of the State address was aimed as much at building broad support for his proposal as it was designed to speak directly to legislators, Team Jerry’s continued emphasis for at least the next few weeks will be on the “inside” game in Sacramento.

“He’s disciplined and focused on things that matter the most,” said his political adviser Steve Glazer. That’s the strategy for now. As another Brown ally put it, “The outside game could push the Republicans into a corner right now.”

So on Tuesday Brown met with Senate and Assembly Democrats. And he’s scheduled to meet with Senate and Assembly Republicans on Wednesday, all the while working on individual and small groups of legislators in hopes of convincing them that it’s in their interest to place his tax and fee measure on the ballot. To do that, he needs agreement from all the Democrats plus two Republicans in the Assembly and three in the Senate.

Thus far, there’s no sign any Republicans want to give him their votes, although some GOP strategists and others have suggested that in exchange for pension reform and perhaps a spending cap of some sort, Brown might wheedle that handful of votes.

One possible scenario, according to a Brown adviser, would be for the governor to continue working the Cul de Sac for a couple more weeks and see what happens when his proposal is brought to a vote in the Legislature. If it fails to pass in the first house where it’s raised, then all hell breaks loose and Republicans in marginal districts get hammered for denying their constituents basic democratic rights.

Predictably, no Republican has yet put forth a formal legislative proposal on pension reform and there’s not a lot of time to consider one if one were forthcoming.

On the other hand, you want pension reform? Just check out Brown’s own campaign web site where he advocates: stopping pension spiking and abuse, renegotiations for a two-tiered system, and end to retroactive benefit enhancements, increased employee contributions, prohibiting pension “holidays,” independent oversight of pension funds, tightening of pension investment standards and a curb on investment placement agents.

All the Republicans have to do is get Brown to agree he will see that legislation seeking all of the above gets introduced and that he’ll fight tooth-and-nail for it and they’d have a pretty good deal to swap for a vote that just gives people a chance to decide if they want to extend some taxes and fees practically nobody is even aware of.

While only about a third of Californians are aware that some taxes and fees notched up a bit a couple of years ago, even fewer have any idea how California is financed or where the money is spent. Worse, according to the most authoritative study known to humankind on the issue of peoples’ knowledge about the California budget, it doesn’t friggin’ matter.

That’s what Eric McGhee at the Public Policy Institute of California demonstrated in “How Much Does the Public Know about the State Budget, and Does It Matter?” published in the California Journal of Politics and Policy. Here’s McGhee’s depressing conclusion:

The real driver of opinion on budget items is politics, not information. Popular programs like K-12 education receive strong support among all groups of voters, and unpopular ones like prisons do not. Within this variation, Republicans and conservatives oppose taxes and spending, while liberals and Democrats are more supportive of both. None of these conclusions is especially surprising, but the contrast with the weak effect of information is important nonetheless.

Overall, the results suggest no easy way out of our current budget impasse. The public might be confused about aspects of the California budget, but they have largely committed themselves to one side or the other in the budget wars. To the extent that they break ranks—for example, Democrats opposing spending or conservatives supporting taxes—it is tied to specific issues in a way that information affects only at the margins. As much as we may hope for it, we cannot educate the public and expect a clear path toward a balanced budget to emerge from the effort.

What this suggests is that a giant teach-in about the California budget is likely to have little effect. As we have argued before, what will matter – should Brown’s proposal make the ballot – is whether the issue is framed as a tax increase or an extension of existing taxes.

Brown Goes Public With Tax Plan Vote Demand

Tuesday, February 1st, 2011

Blunt, feisty and funny, Gov. Jerry Brown called out Republicans Monday night, aggressively challenging them to allow Californians to vote on his proposal to extend $12 billion in temporary tax increases – or have the guts to put  forth their own, all-cuts budget plan.

With a civil but tough tone, he also directly confronted the statewide coalition of local officials who are furiously campaigning against his bid to eliminate redevelopment agencies, saying that “core services” like education, police, fire and health care for the poor are more crucial than their real estate developments projects; positioning himself directly in the political center, he also urged Democrats and liberal advocates for education and social welfare programs to make their own sacrifice, by accepting the $12 billion of cuts he wants.

As a political matter, Brown aimed his 1,722 words, not at the state office holders who crowded into the Assembly chamber to hear him, but at millions of voters beyond the Capitol.  Seeking to build popular support for what he repeatedly called his “honest” strategy to erase a $25 billion deficit, he clearly made the calculation that the time had come to frame the political debate in public, after weeks of low-key, backroom talks with lawmakers.

From the time I first proposed what I believe to be a balanced approach to our budget deficit – both cuts and a temporary extension of current taxes – dozens of groups affected by one or another of the proposed cuts have said we should cut somewhere else instead. Still others say we should not extend the current taxes but let them go away. So far, however, these same people have failed to offer even one alternative solution.

While Brown embroidered his 14-minute State of the State address with appeals for bipartisan cooperation to restore the “exceptionalism” of the California dream, his central message was clear, focusing on turning up the pressure on Republicans to abandon their hold-our-breath-til-we turn-blue stance against providing the handful of votes needed to put a tax measure on the June ballot.

“That’s his style,” said Robert Huckfeld, political science professor at UC Davis and director of the UC Center in Sacramento. “To his credit, he doesn’t pull his punches and he tells it like he sees it.”

“You don’t often see politicians speak that way,” agreed UC Davis environmental science professor Mark Schwartz. “But he’s got nothing to lose and he’s got to get something done.”

The money quotes:

Under our form of government, it would be unconscionable to tell the electors of this state that they have no right to decide whether it is better to extend current tax statutes another five years or chop another $12 billion out of schools, public safety, our universities and our system of caring for the most vulnerable…

When democratic ideals and calls for the right to vote are stirring the imagination of young people in Egypt and Tunisia and other parts of the world, we in California can’t say now is the time to block a vote of the people.

In the ordinary course of things, matters of state concern are properly handled in Sacramento. But when the elected representatives find themselves bogged down by deep differences which divide them, the only way forward is to go back to the people and seek their guidance. It is time for a legislative check-in with the people of California.

Formally dressed in a dark suit, white shirt and red tie, Brown in his plain-spoken words and firm demeanor took on the role of the tough-love truth-teller he had promised during his campaign for governor. Sounding like the adult in a roomful of squabbling adolescents, he pleaded for an end to silly partisan gamesmanship:

This is not the time for politics as usual…

If you are a Democrat who doesn’t want to make budget reductions in programs you fought for and deeply believe in, I understand that. If you are a Republican who has taken a stand against taxes, I understand where you are coming from.

But things are different this time. In fact, the people are telling us–in their own way–that they sense that something is profoundly wrong. They see that their leaders are divided when they should be decisive and acting with clear purpose.

Responding for the California Republican Party — but not necessarily for all the Republicans in the Legislature — CRP Chairman Ron Nehring proclaimed,  “We are determined to fight this unaffordable tax hike, no matter how many ways the Democrats try to soft sell it. Should the governor ever get around to embracing the serious, structural reforms our state needs, we’ll be equally supportive in those efforts.”

Nor were Brown’s allies on the labor left willing to fall in line. Art Pulaski, leader of the California Labor Federation priased Brown’s “vision for long-term recovery that’s been painfully absent in recent years,” but he decried “deep cuts to In-Home Supportive Services, health care and higher education {that] threaten to undermine his vision to rebuild California.”

A few other observations:

The influence of Anne: In his first turn as governor, Bachelor Brown  built a well-earned reputation for rudeness, as he routinely and dismissively dispensed with the niceties of politics. As a 72-year old married to the savvy former business executive Anne Gust, his approach last night was  civil and courteous, despite its tough message. He thanked lawmakers for their “cordiality and good will,” repeatedly invited them to share ideas with him and declared that he looked forward to “working with all of you,” doing a good job of at least faking sincerity.

Ad libs: A year and a half ago, Calbuzz recounted a LMAO appearance Brown made on CNBC   in which he broke the fourth plane, holding a white sheet of paper in front of his face and inviting reporter Michelle Caruso-Cabrera to truncate the interview after she ascribed craven political motives to a case he had brought as attorney general and tried to shine on his attempt to discuss its merits.

In his speech last night, Brown again broke through the bounds of convention, departing from his text  several times to deliver one-liner asides to the assembled politicians, in the manner of a comic telling jokes to the band: At one point he literally called attention to the elephant in the room: “I want to see some Republicans clapping,” he said as stone-faced GOP lawmakers sat on their hands; “That’s ambiguous,” he cracked at another point, after saying public pensions should be “fair to both taxpayers and workers alike.”

The vision thing: As he did in his inaugural address, Brown coupled his unvarnished description of the state’s budget woes with a high-minded appeal to the romantic ideal of California, leavening his message of painful choices with an optimistic view of the future:

Wherever I look, I see difficult choices. But I also see a bright future up ahead and a California economy that is on the mend…

We have the inventors, the dreamers, the entrepreneurs, the venture capitalists and a vast array of physical, intellectual and political assets. We have been called the great exception because for generations Californians have defied the odds and the conventional wisdom and prospered in totally unexpected ways. People keep coming here because of the dream that is still California, and once here, their determination and boundless energy feeds that dream and makes it grow.

Bottom line: While not as trenchant as the inaugural, the SOS was notable for its pull-no-punches candor — a top-notch performance.

Final count: eMeg $159 million, Krusty $36 million; 4.4-to-1 Whitman over Brown. She spent about $38.50 per vote; he spent about $6.60 per vote…But if you add in the primaries, the grand total for eMeg was $178.5 million and for Brown it was $36.7 million.

PPIC: Voters Want Budget-Fix Taxes on the Ballot

Wednesday, January 26th, 2011

A survey by the Public Policy Institute of California has found that two-thirds of likely voters say it’s a good idea to hold a special election on Gov. Jerry Brown’s proposal to extend fee and tax increases to help cover the state’s $25-billion budget deficit. More than half the voters say they’d support the measure.

The findings confirm private polling reported by Calbuzz last week that suggest the principal reason why conservative anti-tax jihadists don’t want to put Brown’s measure on the ballot is that they’re afraid it will pass.

According to PPIC, 66% of likely voters – including 73% of Democrats, 64% of independents and even 55% of Republicans – approve of putting Brown’s proposed extension of fees and taxes on the ballot.

Moreover, 54% of voters – 65% of Democrats, 60% of independents but just 37% of Republicans – favor the extension of personal income and sales taxes and vehicle license fees.

The survey also confirmed findings from polling by Jim Moore for the California Issues Forum that when the elements of Brown’s proposal are characterized as tax increases rather than extensions, voters recoil: 70% reject raising personal income taxes, 64% are against increasing sales taxes and 62% oppose increasing the vehicle license fee. The only tax increase with popular support – 55% — would be an increase in taxes paid by corporations. As we said last week, should Brown’s proposal make the ballot, the battle will be between those who call his plan an “extension” of taxes and those who call them tax “increases.”

In response to the part of Brown’s budget proposal that has generated the noisiest and most orchestrated blow-back, PPIC reported voters favored, by 63-26%, “phasing out funding for local redevelopment agencies and eliminating state tax benefits for enterprise zones in order to redirect that tax revenue to local governments for schools and other local services.”

[Coincidentally, Moore reported on Wednesday that another survey, just completed, found that by 73-20% voters favor Brown’s proposal to “eliminate local redevelopment agency programs that now use property tax revenues for development projects and instead use the money for schools, police and fire services.”  In both PPIC’s and Moore’s polls, Democrats (68% PPIC; 77% Moore) were even more supportive of eliminating redevelopment agencies than independents and Republicans.]

PPIC found that a slight plurality of voters – 45% — favor patching the state’s budget hole with a combination of spending cuts and tax increases, compared to 41% who favor mostly spending cuts and just 8% who support mostly tax increases.

Yet when asked about specific budget areas, 62% of voters say they’d support higher taxes to maintain current funding for K-12 public education, 51% for higher education and 46% for health and human services. Just 14% would support increasing taxes to maintain funding of prisons and corrections.

PPIC reported that when read a description of Brown’s proposed budget, 58% of likely voters say they are generally satisfied, including 64% of Democrats, 57% of independents and even 49% of Republicans.

Nearly three-fourths of voters – 73% — favor the governor’s call to shift responsibility and funds to local governments for various programs now run by the state. The idea is popular across party lines and throughout the state.

On the other hand, only half the voters now support the idea of giving local jurisdictions the ability to pass increased taxes with a 55% vote instead of a 2/3 majority. There’s a partisan divide on that question, with Democrats in favor 61-32%, independents leaning 50-41% in favor and Republicans opposed 61-33%.

While they like his budget proposal, Brown’s approval rating among likely voters is just 47-20% favorable, with 33% undecided. That a third of the voters have no opinion suggests that the governor has done little to reach out beyond the state capital to sell his budget plan – a reflection of his decision to work with legislators and interests groups before turning to the public broadly.

PPIC also reported:

Californians are feeling better about the direction of the state and their own financial futures, but most are still not feeling good. A majority (54%) continue to say that things in California are going in the wrong direction. However, the share of those who see things going in the right direction—38 percent—is up 22 points since October and the highest percentage since September 2007. Most independents (58%) and a large majority of Republicans (81%) remain pessimistic about the direction of the state. But for the first time since September 2007, Democrats are more likely to say the state is going in the right direction (51%) than in the wrong one (39%).

Turning to economic conditions in California, a majority of adults (56%) expect bad times financially in the next 12 months. But the percentage expecting good times—36 percent—is up 11 points since October. Despite their sunnier view of the economic outlook, most (86%) still believe the state is in a recession, with 48 percent viewing it as a serious recession.

PPIC surveyed 2,004 California adult residents interviewed on landlines and cell phones from January 11–18, 2011. Interviews were conducted in English or Spanish. The margin of error is ±3.5 percent for all adults and ±4.2 percent for the 987 likely voters.