Will Republicans lose state budget battle?

February 28, 2011

As the budget debate continues in Sacramento, some political analysts are continuing to question the current Republican strategy of blocking proposed tax hikes, while not offering fiscal solutions of their own. [LA Times]

Recently, 30 of the 42 Republican state legislators joined a new Taxpayers Caucus, signing a “no tax” pledge circulated by Grover Norquist of Washington, D.C., founder of Americans for Tax Reform.

Caucus members further pledged to oppose Gov. Jerry Brown’s effort to allow voters to decide whether temporary tax hikes should be extended for five years.

However, Times columnist George Skelton points out that conservative icon and former California governor Ronald Reagan raised state taxes by a record amount in 1967. Reagan told the legislature that most voters supported him “because they see the need to balance the budget.”

And in 1991, Republican governor Pete Wilson privately warned his colleagues that “they would become irrelevant” if they didn’t pass a tax increase. They eventually listened to their governor and taxes were increased.

Some Republicans have based their opposition to taxes over fears that businesses will flee the state.

In fact, businesses are neither significantly fleeing the state — for any reason — nor moving in, according to a study by the Public Policy Institute of California.

“Business relocation — the movement of business establishments from one state to another — accounts for a very small share of California’s unemployment fluctuations,” institute analyst Jed Kolko wrote in September. “In fact, relocation accounts for a smaller share of job gains and losses in California than in most states.”

Kolko studied data from 1992 through 2006 and found that “only 1.7% of all job losses were due to establishments leaving the state.”

Meanwhile, the Los Angeles Chamber of Commerce on Friday endorsed Brown’s plan to solve California’s chronic budget deficit — currently around $26 billion — with half spending cuts, half taxes.

Brown hopes to have his budget proposals passed by mid-March.

 


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11 Comments

  1. Sally says:

    The Republicans are not going to be the only losers, the people of California will be the losers.

    (3) 3 Total Votes - 3 up - 0 down
  2. WiseGuy says:

    I’ve lived and worked in Arizona. Believe me, it’s well worth paying higher taxes to live in California where the environment and public services are so much better.

    If more factories are being built in Arizona that’s fine with me. Arizona needs that kind of stuff more than California. Those factory workers can then come to California for vacation and retirement and spend their “clean tourist dollars” here. Win-win.

    If all these people who whine and threaten to move from California would hurry up and move, I think we might be better off.

    (-2) 4 Total Votes - 1 up - 3 down
    • SLORider says:

      Will they ride their “clean tourist dollars” to California like a magic carpet? Or, will they fly or drive an oil burning vehicle?

      If you seriously believe that tourism and hospitality can sustain this state’s budget and its services… well, that explains the pointlessness of attempting any rational discourse at all. Just eliminate all industry, no problem, eh?

      What will Californian’s do for work? Clean hotel rooms and work the rides at Disneyland?

      (3) 3 Total Votes - 3 up - 0 down
  3. Vagabond says:

    Dont forget the last empty shirt the GOP put up for election Fiorina was responsible for shipping untold jobs out of the country.
    The GOP needs to get behind companies that support jobs and investment IN California, not mega corporations that steal California’s resources for the pockets of international millionaires.
    The GOP could do so much better, but it seems they only care about glitter.

    (5) 13 Total Votes - 9 up - 4 down
    • Russ J says:

      Empty shirt is defined by our great loser of the Decade…..Abel Maldonado. There will surely be some Republican hack that will take a pay off to increase our taxes again. The largest ever I’m sure. My Republican party reps are the worst; the say no new taxes and then refuse to sign a pledge, just like good old Abe, they broker a deal and sell out the conservatives who elected them. At least the liberal democrats tell it to you straight; “We’re going to tax you into poverty”. Public unions own Sacramento. I’m working till I’m dead – what a wonderful State.

      (-2) 4 Total Votes - 1 up - 3 down
  4. SLORider says:

    Don’t forget the billions of dollars of jobs NOT COMING to California:

    Intel to Invest More than $5 Billion to Build New Factory in Arizona
    * Intel is building a new $5 billion-plus factory in Arizona.
    * Fab 42 will be the most advanced, high-volume semiconductor manufacturing facility in the world.
    * New fab will create thousands of construction and permanent manufacturing jobs at Intel’s Arizona site.

    CHANDLER, Ariz., Feb. 18, 2011 – Intel Corporation today announced plans to invest more than $5 billion to build a new chip manufacturing facility at its site in Chandler, Ariz. The announcement was made by Intel President and CEO Paul Otellini during a visit by President Barack Obama at an Intel facility in Hillsboro, Ore.

    Fab 42 will be built as a 300mm factory, which refers to the size of the wafers that contain the computer chips. The project will create thousands of construction and permanent manufacturing jobs at Intel’s Arizona site.

    Obama tours Intel’s new Hillsboro, Oregon factory
    Obama recently toured the new $4 Billion research factory at Intel’s Ronler Acres campus in Hillsboro. The factory and its support buildings total 1.8 million square feet. The clean room alone is 200,000 square feet, the size of the biggest Costco.

    (7) 15 Total Votes - 11 up - 4 down
    • WiseGuy says:

      That’s good news, SLOrider. California is much better suited for expansion of agriculture, rather than factories. Arizona seems to be a much preferable place to set up heavy industry, while California is better suited to agriculture, tourism, entertainment and outdoor recreation.

      (-8) 14 Total Votes - 3 up - 11 down
      • SLORider says:

        California is big enough for industry. I haven’t seen any cows in Silicon Valley lately.

        By the way, does “outdoor recreation” include the Dunes? Just sayin’…

        (2) 6 Total Votes - 4 up - 2 down
        • WiseGuy says:

          Of course that includes the dunes. What’s your point?

          (By the way, if it wasn’t for the work of the Sierra Club, there would be little or no “outdoor recreation” in our local dunes, because PG&E was planning on building a nuclear power plant there, until protests by the Sierra Club stopped that from happening. )

          But, SLOrider, believe it or not, everything in the world doesn’t revolve around catering to your obsession with riding motorcycles in the dunes.

          (-1) 3 Total Votes - 1 up - 2 down
  5. Cindy says:

    “data from 1992 through 2006 and found that “only 1.7% of all job losses were due to establishments leaving the state.”
    Sure but what about “JOBS” leaving the state?

    The key word here is “establishments”. Yes, many establishments have remained (in corporate name along with all their tax breaks) but they have considerably downsized a high percentage of jobs that Americans used to perform and hired those jobs out overseas.

    (14) 14 Total Votes - 14 up - 0 down
  6. CA Native says:

    I’d rather see them sign a ‘no corporate political contributions’ pledge

    (19) 31 Total Votes - 25 up - 6 down

Comments are closed.