Measure the State Budget by Sustainability
By Senate Republican Leader Dennis Hollingsworth
As seen in the FlashReport
Sustainability should be the benchmark taxpayers use to measure state budget proposals. It’s obvious that past state budgets have postponed real solutions, proved unsustainable, and led to the current budget mess.
This year legislators face another budget crisis and another round of budget proposals. The difference between the budgets Republicans and Democrats are offering is simple: the Republican budget is sustainable; the Democrat budget is not.
The Democrats’ budget depends on plans to raise taxes by $4.5 billion. That act alone will take money away from consumers, drive more employers out of California — or simply out of business, and continue the fiscal death spiral that grips the state. Democrats want these new taxes to pay for $3 billion in welfare programs that California can no longer afford. There’s a certain consistency in their thinking. Democrats know their policies will result in more Californians losing jobs and turning to government assistance, so they want to “help” the taxpayers they’ve pushed over the edge.
Their tax measures offer more unsustainable ideas. They propose to convert “temporary” taxes to permanent taxes–even though voters rejected those taxes by a two-to-one margin last year. They propose raising income taxes on most people earning $20,000 to $200,000 a year at a time when the middle class is already straining to make ends meet. They propose to raise taxes on employers and delay business incentives, when jobs are already leaving the state.
The incontestable truth is that government cannot spend its way to prosperity. Every dollar the government spends is a dollar that was first taken out of the economy in the form of taxes. Last year, personal income in California dropped by $40 billion. Increasing taxes now will only accelerate that decline. Unemployment has reached heights not seen since the 1940s. With less money to spend, most people are cutting back wherever they can—reducing economic activity and tax revenues yet again.
The Democrats’ tax-hike budget will further corrode California’s economy, and that’s simply not sustainable.
Republicans propose to pare the state budget back to a sustainable level by cutting unaffordable programs while maintaining education funding at last year’s levels. The Republican budget avoids new taxes, leaving those hard-won dollars to be spent by the consumers and businesses that earned them.
Protecting middle-class wage earners, shunning job-killing taxes, and delivering promised incentives to private sector employers are vital steps in a sustainable plan to restore prosperity and encourage job creation. Restraining spending is another, equally important step, needed to break the cycle of tax-and-spend government growth. Republicans aim to bring government spending into line with existing state revenues, just like ordinary Californians must do every month to sustain their household budgets.
Residents of the Golden State are waiting to see whether legislators will choose another tax-and-spend budget that can’t be sustained, or whether they will arrive at a sustainable budget that matches government spending to income and protects hard-working taxpayers. Given the heavily weighted Democrat majority, the Legislature is unlikely to adopt a strong, sustainable budget. Unless Democrats adopt the Republican budget proposal—the only sustainable budget plan—our state will base its economic future once again on Democrat schemes and dreams, not reality.