The State has a $68 billion deficit. It is losing 25% of its income tax revenue, property taxes around the State are plummeting. Thanks to the Democrats Medi-Cal money meant for honest citizens is instead going to illegal aliens—thus over crowding our hospitals—and do not forget the racist, failed government schools.
Yet, the Sacramento Democrats are looking to raise taxes—forcing even more productive families and successful businesses out of the State. Are they idiots, economic illiterates or want to kill off California.
OpEd: More Taxes Won’t Solve Our Problems
BY STUART WALDMAN, San Fernando Valley Business Journal, 12/4/23 https://www.sfvbj.com/commentary/oped-more-taxes-wont-solve-our-problems/
California’s tax structure is beginning to resemble a high-stakes game of Jenga rather than serving its intended purpose of funding public services and designated programs.
Despite one crisis after another – including a state housing shortage, businesses closing or leaving the state, public education failures, and increasing rates of homelessness – officials continue to push for more taxes, believing that another tax will miraculously stabilize California’s economy and address the state’s woes. Yet, high tax rates with unreasonable business regulations continue to push businesses away from the state, with more businesses leaving and taking jobs with them every day.
This is not a new issue, as taxpayers in Los Angeles have seen elected officials make promises for decades regarding these crises with very little movement. Voters have supported new tax increases for years, only to be left with dismal results and an ever-growing government bureaucracy. Meanwhile, proponents continue to pledge that new tax dollars for specific programs will benefit those that need it, as if this is the one time things will be different. The reality is that for every Measure M – a successful L.A. Metro tax measure that has funded numerous transit improvements – there are countless other measures that send taxpayer money into the abyss. It’s a rinse-and-repeat system that leaves citizens skeptical of the true impact of their tax dollars.
Within the last few years, California boasted a $100 billion state budget surplus, which could have resolved critical issues including infrastructure development, workforce training, promoting housing initiatives, or bolstering the state’s Rainy-Day Fund. Instead, legislators opted for a questionable choice – distribute $600 stimulus checks to over 5 million Californians, reminiscent of a monthly parental allowance to a child. Now, the state faces a $32 billion budget deficit.
As we look toward next year, California is poised for a significant tax upheaval. During this year’s legislative session, the state legislature proposed several constitutional amendments, including ACA 1 and ACA 13, which pose tangible risks to taxpayer protection and the state’s economic stability. ACA 1 would undo Proposition 13, a critical safeguard against excessive tax hikes, by lowering the threshold for local tax measures to a simple majority. California voters have made it clear that they want tax measures to be supported by a two-thirds super majority. If an idea is good, and if a measure is reasonable, it can get a two-thirds vote.
ACA 13, ushered through at the end of the legislative session, would erode the citizen initiative process by imposing content-based distinctions on constitutional amendments. This means that any proposal to increase the voter threshold to adopt any state or local measure must also receive a proportion of votes equal to or greater than the highest voter approval requirement for the measure to be adopted. This proposition is aimed at thwarting a November 2024 ballot initiative that the business community is supporting that affirms voters’ commitment to require a two-thirds vote to increase taxes whether it be from legislative bodies or citizens initiatives.
Though both proposals use issues like housing and homelessness to mask their true agenda, it seems pretty clear that the Legislature’s motive is to eliminate taxpayer protections and make it easier to raise your tax rates.
Which brings me to my next point. In Los Angeles County, a citizens initiative is now being circulated for signatures to renew and double Measure H, a 2017 quarter percent sales tax, which the Valley Industry and Commerce Association supported, that aimed to address the homelessness crisis by funding countywide services. Despite its initial approval, it’s hard to tell where Measure H dollars have succeeded to significantly reduce homelessness. It’s fair for voter to ask what their money has been spent on and if it is being spent wisely.
The drive to renew and double Measure H ahead of its 2027 sunset date is also fraught with more problems than you could imagine. The new proposal currently includes the requirement for all nonprofit service providers and affordable housing builders to pay prevailing wage, upwards of $44 an hour, which means fewer services and less housing. This is why it costs more than $800,000 to build a single unit of affordable housing in Los Angeles versus $300,000 to build a single unit of market-rate housing.
The new proposal also eliminates the taxpayer protection of a sunset date, meaning instead of the 10-year sunset the original Measure H included, this new proposal would never have to go before the voters again to justify its need.
The irony of this measure lies in the belief that more taxes will magically solve our homelessness problems. Despite the billions that flow into government coffers, tangible results remain elusive. It’s high time for an honest conversation about the effective use of our tax dollars.
It’s not just about addressing high taxation; it’s about holding officials and ballot proponents accountable, implementing competent financial management, and using resources responsibly. Pouring more money into a flawed system won’t fix anything at all. A shift in the economic approach of both state and local government is long overdue.Bottom line: the current tax trajectory risks California’s fiscal health, and we can no longer afford to tread the same path.
Stuart Waldman is president of the Valley Industry and Commerce Association, a business advocacy organization based in Van Nuys that represents employers in the San Fernando Valley area at the local, state and federal levels of government.
