The following is an op-ed that I just received from Senator Bob Dutton's office.  I think it's important that we are aware of what our local elected officials, especially in the state legislature, are proposing as solutions to the current economic crisis... especially in times when we are almost paying $5 a gallon for gas.  I know the GOP does not always have the right answers. I also know that raising taxes is almost never the solutions.  It's not even about theories anymore- history has proven time and time again that raising taxes only hurts- not helps- the economy.  Feel free to post your responses and any solutions that seem practical...

New Taxes - Wrong Answer!
By Sen. Bob Dutton

The long awaited May Revision of the 2008-09 budget was released by Governor Schwarzenegger on May 14th and while many have expressed some level of surprise at the revised budget, there was really nothing shocking. We must still figure out how to balance spending with revenues.

While revenues to California won't be as robust as projected, it's important to point out that more money is projected to come into the state's general fund in 2008-09 than did this past year. California gets its lion's share of revenue from three main sources - Corporate, Personal Income, and Sales taxes. Despite a weakened economy, revenues from these three sources are projected to increase by $810 million this next fiscal year.

There's no doubt, however, that the economy has weakened over the last year. Ask anyone who is struggling to pay $4 a gallon for gasoline or who just lost their home to foreclose and they'll be the first to tell you that this economy has seen better days.
While many believe the answer to the budget deficit is to raise taxes, what California really needs is relief, recovery, reform and accountability to turn the economy around. Raising taxes isn't the answer.

While I applaud Governor Schwarzenegger's effort to maximize the cash generated from the lottery, I am against the trigger for a tax increase. California's 7.25% base sales tax rate is already the highest in the nation.  What's more, history tells us tax increases won't help and in fact hurt the very people the tax increases were intended to help.

In 1991, the state faced a budget gap of $14.4 billion. Similar to today's situation, the economy was in a downturn, property values were plummeting and state revenues were down.  Governor Pete Wilson and the Legislature adopted a series of measures to close the gap including fee and tax increases.  Despite optimistic projections, increased General Fund revenues never materialized.  As per capita personal income grew, actual revenue collections failed to meet expectations.  In other words, increasing taxes and fees served as a deterrent for taxpayers to buy goods. Given the current state of the economy, Californians need relief from a tax burden that is too large and we must do everything we can as a legislature to lower the cost of living and doing business in California.

We need recovery.  The legislature should be looking for ways to stimulate our economy by creating economic incentives for business.  When the business climate is good, the state easily generates sufficient revenue through existing taxes, both income and sales.  In 2007, California's business tax climate ranked as one of the worst at 47th in the nation. 

As a result of higher taxes, stringent labor laws and excessive government mandates, businesses are moving valuable jobs to states with more business friendly attitudes. Just recently, ABC studios announced that it was moving production of the hit show "Ugly Betty", taking jobs away from Los Angeles to New York because of lucrative tax credits.  We need these jobs to stay in California.

No serious discussion of the budget would be complete without mentioning reform.  The tax-and-spend crowd will tell you we have a revenue shortfall.  What we really have is a spending addiction. In Sacramento there is no realistic balance between revenue and spending. Without making substantial budget reforms, California's financial outlook will continue down the wrong track.

The Governor's idea of creating a bipartisan tax commission is worth exploring, but conversations addressing revenue must go hand-in-hand with discussions about over-spending or the discussions become meaningless. 

Government also needs to be accountable for its spending.  Californians depend on government for vital services and we must establish priorities in order to serve the greatest number of people while making sure we spend the money efficiently and economically. As legislators, we should demand it.

In addition to cutting waste and duplication, the legislature should explore all potential funding sources such as selling surplus properties and redirecting unused money.

The program known as "First 5" currently has a surplus of roughly $2 billion. The overlooked funds were originally intended to improve the lives of children under age 5 by providing important health care and early development programs.

Through mismanagement and political maneuvering, First 5 has lost sight of its goals and has used funds for things such as teaching Italian to preschoolers, ice skating lessons, Halloween parties, renting charter buses for field trips to the Jelly Belly factory in Fairfield and field trips to the Monterey Bay Aquarium.

Why should that money sit gathering dust when it could be redirected and used to fund other children's health care programs?

Republicans believe the serious budget problems we're facing can be solved with some common sense solutions.  We have brought measures to the bargaining table that encourage government reform, stimulate the economy and allow flexibility for hard working California families.

The Legislature has a duty to generate adequate revenue and to control spending through government reform, economic incentives and sensible, thoughtful spending reductions. Californians are already overtaxed. We should not be adding more tax burdens on the backs of our hard working families. 

Faced with these new budget numbers, the priority in Sacramento should be to turn the train around - not drive it off the cliff.