Jobs - Not Taxes - Answer to State Revenue

By Sherry Hodges

"Jobs - Not Taxes - Answer to State Revenue," by Sherry Hodges, was published on The Flash Report on March 13, 2012.

But the "balanced budget" Brown has been promising taxpayers is turning out to be just another political fantasy. Legislative Democrats are balking at Brown's proposed cuts in health and welfare programs, state spending is running $2.5 billion above budget estimates, and the Legislature's Budget Analyst now projects revenue for next year will be $6.5 billion short of Brown's original estimate. It turns out Brown's "balanced budget" is billions of dollars out of balance.

With the Governor's original budget exposed as a fantasy, in part because state spending has once again increased beyond what was projected, voters are getting wise to these shell games, and they want them to stop.

Voters are also getting wise to the unsustainable cost of public employee pensions. With the Democrat-controlled Legislature doing the bidding of their union-benefactors and dragging their heals on any kind of meaningful pension reform, voters aren't going to approve tax increases to bail out state pension systems to pay for benefits that far exceed those received by the taxpayers who are left holding the bag.

Finally, voters are beginning to understand the underlying reason for the state's boom-and-bust revenue cycles. Everyone from the Legislative Analyst to the state Chamber of Commerce have pointed out that state government has become over-reliant on state capital gains and income taxes on California's highest income earners. These revenues fluctuate dramatically based on how well these top earners are doing. This volatility has contributed to the huge deficits our state has faced in recent years.

When voters discover that the Governor's tax-the-rich plan makes this volatility even worse and threatens to drive high-income earners and jobs out of state, they are going to tell the Governor and legislature to go back to the drawing board.

For all these reasons, I'm confident California voters will overwhelmingly reject Brown's tax increases in November.

Jobs and government reform are the solution to the state's budget problems, not more tax increases. A 2% drop in unemployment would give California an additional $1.2 billion in tax revenues. But the Governor's plan drives job producers out our state, not into it. That's where legislative Republicans may have a unique opportunity after the November elections. If Republican leaders are prepared and able to articulate a comprehensive plan to reduce job-killing regulations and create a tax system that is stable, equitably distributes revenues between state and local government, and enables California to grow its revenues by growing its businesses instead of killing them and driving them out of state, they are likely to receive a sympathetic ear from voters who are once-and-for-all fed up with Sacramento game-playing.

That's part of why I'm running for the Assembly in the 76th District. It's the opportunity to help draft that plan, explain it to voters and return our state to prosperity that motivated me to run. I'm looking forward to the challenge and to the opportunity to really make a difference for the future.