Politicians Bankrupted California, Not Prop. 13

Carol Platt Liebau
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Posted: Jun 29, 2009 12:00 AM

As the end of California’s fiscal year approaches, the Governor and state legislators confront a $24 billion deficit. While Republicans and Democrats wrangle over how to address the gaping shortfall, some members of the press have started to look for a scapegoat for the fiscal train wreck. Many have blamed the California taxpayer’s only protection: Prop. 13, the 1978 measure capping state property taxes at 1% of a home’s assessed value.

Perhaps the most egregious example of the finger-pointing is a recent piece from TIME’s Kevin O’Leary, moaning that “Before Prop 13, in the 1950s and '60s, California was a liberal showcase.” He insists that “at the root of California's misery lies Proposition 13,” and concludes that “in California, the conservative legacy lives on.”

How ridiculous. Of all the problems contributing to the fiscal mess, state under-taxation is the least of them. California’s sales and gas taxes are the highest in the country – and it has the highest vehicle license fees and the second-highest top-bracket income tax, too. Its corporate tax rates are the highest of all western states, and for the fourth year in a row, a survey of 543 CEO’s found that California’s toxic combination of high taxes and intrusive regulations made it the worst place in the nation to do business.

In fact, at the real root of California’s fiscal misery is the profligacy of arrogant, big-spending, left-wing legislators, who have treated taxpayers as if they exist only to support the government. Their attitude was exemplified in a recent statement from state assemblywoman Noreen Evans (D-Santa Rosa), chairman of the state Budget Conference Committee, repudiating the governor’s call for the state to “live within its means”:

Well, there is this mantra out there – “live within our means” – and while that sounds really nice . . . and it sounds really responsible, it’s meaningless. Our means are completely within our control . . . We have just given away huge corporate subsidies in February; we have given away other tax reductions over many, many years; we’ve created tax loopholes; in good times, we routinely give away taxes, and then in lean times we never replace those tax deductions or close those loopholes. . . . So “live within our means” doesn’t mean anything. The fact is, we have a state with a population that have [sic] needs that we have a moral obligation to provide.

Her assertions – and the obnoxious sense of entitlement underlying them – defy credulity. For politicians like Evans (and the legislature is full of them!), when the hardworking or productive keep more of what they have earned, it’s only because politicians have been “giving away” the tax revenues that purportedly belong to them. In this mindset, meeting the “needs” of a greedy, ever-expanding government is the only imperative; taxpayers are nothing more than cash cows, commanded to provide the fodder that allows Evans and those like her to meet their “moral obligations” with other people’s money.

Remarkably, even as they have driven California into the fiscal ditch (and demanded ever-higher taxes from its citizens), Evans and her colleagues remain the most highly compensated state legislators in the nation. Along with their six-figure salaries, taxpayers supply them with cars, gasoline and auto maintenance. As regular Californians’ budgets are stretched to the limit, many of the “cuts” the state Senate is debating for itself are laughable. They include whether to reduce the benefit that provides their staffers with two new pairs of glasses yearly (or sunglasses, for those who don’t wear glasses). The change would limit workers to one new pair – of course, courtesy of the taxpayers.

Ultimately, any honest assessment of California’s plight must assign responsibility for the state’s fiscal crisis – not to the taxpayers who voted for Prop. 13 three decades ago – but to the politicians who have subsequently exploited them without mercy. Indeed, if spending had simply reflected average population growth plus the average increase in the cost of living since 1991, there would now be a $15 billion surplus. After adjusting for inflation, the state now spends nearly 20% more per capita than it did 18 years ago; even as California’s tax revenues increased by 167% during that period, state spending exploded by 189%.

Left-wing legislators like Noreen Evans can demand more taxes and journalists like Kevin O’Leary can bemoan the existence of Prop. 13 all they like. The people know better. And when voters overwhelmingly rejected further tax increases last month, they sent a clear message: It’s time for the politicians to start working for Californians again, rather than the other way around.