Getting the History Straight
by Ray Haynes - State Capitol
3-28-2008 4:09 pm

I usually don't comment on commentators.  Most of the commentators in Sacramento are lefties or Democrat leaning, and so, are wrong, and not worth the time of commenting.  One that hits things right some of the time, however, is Dan Walters.  He has inside information, years of insight, and a fun writing style.  Sometimes he pontificates too much, but he is worth the read.

If he has any faults, however, it is his idea that the system is Sacramento is broke because "both sides" are at fault.  He said today that the current budget crisis is the responsiblity of both parties because the Democrats spent too much, and  "Meanwhile, Republicans have been blasting away at the Democrats for squandering years of revenue increases and ignoring their own role of demanding unaffordable tax cuts."  What?  First, let's inspect the comment.  Demanding unaffordable tax cut does not a tax cut make.  How can the state be in a deficit for tax cuts demanded, but not enacted.  Quite simply, it is not.  I can understand wanting to attack Republicans and Democrats alike, but the better attack is not that Republicans asked for tax cuts they did not receive, but rather enough Republicans capitulated to the Democrats' demands for huge spending increases to put us into a deficit.  That is a legitimate claim, but the claim that Republicans "demanded" unreasonable tax cuts, and are therefore "equally responsible" for the deficit is absurd on its face.

But let's look at the point he is trying to make.  He is trying to see that tax cuts enacted at the request of Republicans caused the deficit.  What tax cuts could those be?  There have only been two tax cuts in the last 20 years, since the Deukmejian rebate, one was a small business tax cut in 1996 (about $300 million, enacted when Republicans ran the Assembly) and the 1998 car tax cut ($4.1 billion at the time of enactment, about $6-7 billion now).  The 1998-99 general fund budget was $57 billion.  Todays total general fund budget is $112 billion.  So, since the enactment of the 1998-99 budget, spending has increased $55 billion a year, tax cuts have taken away (even assuming tax cuts "take away revenue") about $6 billion a year.  If Walters was honestly assessing blame (rather than trying to appear to be some kind of "fair"), he would say that, at the very least, the tax and spenders are, under the most beneficial analysis, 85% at fault, and Tom McClintock, Pete Wilson, Jim Brulte and I are 14% at fault for the current budget crisis (since it was our work that created that cut).  And since Curt Pringle and Bill Lockyer engineered the 1996 tax cut, they are about 1% at fault.

That is assuming best case scenario.  Since 1998, and the Sinclair Paint decision, the Democrats in the Legislature have been moving general fund expenditures to special funds (total special funds in 1998 were about $15 billion, now they are over $40 billion.  If you figure in this increased spending, the spendthrifts in the Capitol (which do not include most of the Republicans) are responsible for 95% of the problem.

Fairness is not a substitute for honesty, and solutions that do not deal with issues honestly will fail.  If California Forward really wants to solve California's budget crises merry-go-rounds, it will take steps to restrain spending.  Since, however, most of the people on the group believe that tax cuts are bad, and spending increases are good, I would anticipate that their recommendations will be methods to make increasing taxes easier.  That is the real reform the big government types want, and that kind of reform will be exactly the wrong thing to do.