Taxpayers again take California fiscal hit
Throughout California, tax increases are popping up on ballots like mushrooms. The state wants voter approval for billions of dollars in bonds, borrowed money that will have to be repaid with interest. And any ballot measure that reduces taxes is opposed by public officials as a threat to public safety.
A clue to the answer can be found in a new report from the nonpartisan Legislative Analyst’s Office in Sacramento.
Every year, the LAO publishes the “California Spending Plan” to summarize the state budget. The 2018-19 budget has set another record — $138.6 billion in general fund spending, plus $58 billion from special funds. In addition, the state will spend $4 billion in bond funds and $107 billion in federal funds.
The LAO reports that this year, the Legislature was “faced with decisions over how to allocate $10 billion in discretionary general fund resources.”
Discretionary resources are the funds that are not controlled by requirements in the state constitution, such as Proposition 98, which mandates that a substantial share of general fund revenues must go to education.
The state’s “big three” general fund taxes are the personal income tax, the sales and use tax and the corporation tax. The LAO says revenue from those taxes is projected to increase 4 percent. Government revenue is going up, even without new or higher taxes.
Why isn’t it ever enough?
One reason is the tendency of elected officials to commit the state to higher ongoing spending that quickly becomes unaffordable if there’s an economic slowdown.
The LAO says this budget package increases the state’s ongoing spending commitment by about $1.5 billion annually. That includes another $360 million for CalWORKS cash grants, an additional $348 million to the universities and $139 million to raise the salaries of the state’s already highly paid prison guards.
Whenever there’s a measure on the ballot that will raise taxes or lower them, you can depend on public officials to shout from the rooftops that if the government loses that money, everyone will fall into a pothole and die of thirst because there will be no money for roads, water, paramedics or rescue helicopters.
We never hear a government official say that if taxes are lower, there will be less money for welfare payments, administrative bloat in state universities and pay raises for state workers.
But that’s what the budget says.
New contracts with generous raises took effect last year for employees in 17 of the state’s 21 bargaining units, causing the cost of salaries to shoot up by $700 million in calendar year 2017 and by $1.4 billion in the current budget year.
According to the State Controller’s Office, the salaries of state employees currently cost us $17.7 billion a year, and that doesn’t include the salaries of employees at the universities, colleges or court.
Over the summer, Gov. Jerry Brown made new deals with three more unions, negotiating raises for the California Correctional Peace Officers Association (the prison guards), Professional Engineers in California Government and the California Association of Professional Scientists.
The LAO report says all these new contracts “significantly increase state annual costs for years to come” due to raises and growing costs for pension and retiree health benefits.
That’s where your tax dollars are going. And Gov. Brown says if you don’t want to pay higher taxes, you’re a “freeloader.”
We know what taxpayers are in California, and it does start with an “f.”
Susan Shelley is an editorial writer and columnist for the Southern California News Group. Susan@SusanShelley.com. Twitter: @Susan_Shelley.
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