When the economy is in the tank, don’t raise our taxes

The state recently entered the second month of the 2008-09 fiscal year without a budget. While leaders of both parties have been negotiating, a reasonable compromise is nowhere in sight.

The stakes of this year’s budget could not be higher as California faces a $15 billion budget shortfall. I call on the Legislature to put aside their partisan differences and pass a responsible budget for the benefit of all Californians.

Unfortunately, the majority party’s solution is to increase the financial burden on individuals and businesses. In early July, the majority leadership in the Assembly proposed a budget that increased taxes by approximately $9 billion.

The proposal called for state income and corporate tax rate increases. The plan also increased franchise taxes on state businesses and further proposed to eliminate various tax deductions that many businesses rely upon when looking to expand. That expansion is how new jobs are created, which is a must if we are to see the kind of quick recovery that California’s economy is capable of when not hampered by further taxation.

As you can see, I am strongly opposed to increasing taxes — especially in an economic downturn. Californians are acutely aware of the effects of these sluggish economic times. We are all faced with higher gas prices, higher food costs and many people’s financial security has also been compromised by the mortgage crisis gripping the state.

Spending is the

problem

At a time when Californians are already stretched to the limit financially, I see no rational reason for placing an even higher tax burden on the hard-working men and women in our state. It has been shown time and time again to be the absolute wrong thing to do when you are trying to stimulate a struggling economy.

Fundamentally, the state has a spending problem. Since the approval of the 2004-05 budget, state general fund expenditures have increased by approximately $30 billion. The fact that we have not been able to rein in spending has been a major contributor to the current shortfall. In previous years, the state committed one-time revenue increases to ongoing state programs. Now that revenues have declined, the state cannot meet its commitments.

A cap is the answer

It is for this reason that I believe that the state should implement a spending cap. A cap will ensure that state spending remains consistent through years in which revenues are good and years in which revenues are down.

Most importantly, the time has come for the Legislature to work together and address the structural budget problem. The Legislature has avoided the problem for far too long. This year presents an opportunity to take meaningful action for the benefit of the state. This will only occur, however, when politicians in Sacramento fully understand that they are there to serve you and not to selfishly serve themselves.

Gary Jeandron is a member of the Palm Springs Unified School District and is a candidate for the state Assembly in the 80th District. Reach him at gary@garyjeandron.com.