Home
 

ALG Radio Commentary

By Bill Wilson

ALG Editor’s Note: As noted by the following featured radio commentary from ALG President Bill Wilson, California tax payers deserve their tax refunds—no questions asked.

Editorial: Economic Exodus

With a corporate tax rate of 8.84 percent (40.7 percent when the federal rate is also factored), a state income tax rate as high as 9.3 percent, and gasoline taxes at a combined 64 cents per gallon, California has gone from being the Golden State to the state that steals your gold. And her residents may no longer be putting up with it.

As reported by the AP’s Michael Blood, “The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period—more than any other state, according to census estimates.” The article went on to note that the only other state whose exodus was comparable was New York’s, which lost 126,000.

Strangely, Mr. Blood assures his readers that the loss of residents from California is “extremely small” because the state is so large and its population is still growing. Perhaps, if more could afford to leave, they would. The process of moving can be costly even when the economic outlook is rosy. And if only there were jobs waiting for them elsewhere. Escape may indeed be the goal, but there has to be somewhere to escape to, and residents will need the means to get there.

As the very same article notes, the state’s unemployment rate rose to 8.4 percent in November, and foreclosures for the year are topping 230 thousand. The state’s economy—severely hampered by federal and state government policies—is hurting, as are the economies of the several states. Residents complain of the cost-of-living rising, including taxes and property values, to unaffordable levels. As Barry Hartz is quoted as saying, “The saddest thing I saw was the escalation of home prices to the point our kids, when they got married, could not live in the community they lived and grew up.”

It’s simple economics. The higher the cost of living—including taxes and asset values—the less wealth individuals will be able to accumulate.

And until the politicians in California figure out how to reduce the burden that excessive government creates in the way of the tax burden, it will continue to lose residents like a leaking ship that the crew refuses to repair. And the Golden State will continue to lose its luster.

Editorial: Terminating the Budget


Despite Arnold Schwarzenegger’s propensity to be less than amiable towards many limited government issues, the California Governor has done all Californians a favor—and served as a great example to the rest of our nation’s leaders—by promising to terminate state Democrats’ latest budget plan.

Faced with an unprecedented $40 billion state budget deficit over the next 18 months, California—singlehandedly one of the world’s largest economies—is in dire straits. To make matters worse, its nearly one-party legislature has been mired in a “tax and spend” mindset for years now.

Predictably enough, these Democrats’ methodology in dealing with the current budget crisis is higher taxes and meager, half-hearted spending cuts. And that is exactly what their latest budget plan called for. Personal income and sales tax hikes, a new 39-cents-per-gallon fee on gasoline, and a new tax on oil production were among its provisions.

Thankfully, California Republicans—and now the Governor—have remained steadfast in refusing to buckle under pressure from state Democrats and compromise their principles of fiscal responsibility. In their eyes, a budget shouldn’t be passed for the sake of passing a budget. With regards to the latest Democrat-conceived proposal, Governor Schwarzenegger said the following at a recent news conference:

"This package they are sending down does only one thing, and that is punish the people of California. This fell short on every single level … so I cannot sign this."

In addition to fighting for spending restraint, Arnold Schwarzenegger deserves credit for resisting the “business as usual” mentality that is so rampant among entrenched politicians—more specifically the “vacation as usual” mentality. Just as Congress decided to take a month off during the height of the offshore-drilling debate earlier in the summer, many California legislators want a long Christmas break. As the Governor urged:

"They should stay here, work some more on the budget. I am willing to stay here…and I think the Legislature owes it to the people of California to solve this problem before Christmas."

All in all, California—and its leadership—ought to serve as a lesson not just to other states, but to the Federal Government as well. When out of control spending, declining revenues in a tough economy, and incompetent, one-party leadership combine, nothing but chaos can ensue.

Moreover, the powerful unions and other special interests have had such a firm grip on state lawmakers that passing any kind of budget cut—especially within their realms—is nearly impossible. For Governor Schwarzenegger to buck these special interests and take a stand for spending restraint does require sacrificing significant political capital. To be fair, it does take some courage to stand up to those interests.

Hopefully the nation’s incoming leadership—with its Democratic controlled executive and legislative branches—won’t befall the same fate as California, especially considering the ever-worsening economy and increased influence of special interests.

If it does, hopefully we can count on leaders akin to California state Republicans willing to resist the one-party rule that calls for endless tax increases and limitless Big Government encroachment.

Higher Education: Boon or Boondoggle?


“We are living in 1937, and our universities, I suggest, are not half-way out of the fifteenth century. We have made hardly any changes in our conception of university organization, education, graduation, for a century- for several centuries.” – H.G. Wells

As the State of California teeters on the brink of a budget crisis, the educrats with the California State University system are up in arms over Governor Schwarzenegger’s proposed $1.3 billion in budget cuts for the state’s higher education system.

“I really believe California is at a crossroads—a political, educational, cultural, economic crossroads. Is the state going to dedicate it’s resources to invest in young people’s futures, invest in California’s wherewithal, or disinvest?”

While it is no doubt a noble cause to invest in “young people’s futures”, perhaps the Chancellor should re-examine the behemoth that is America’s four year college system before crying foul over Mr. Schwarzenegger’s planned budget cuts for the boondoggle that is the California State University system.

A quick glance at a standard course catalog from any institute of higher education in America today reveals a myriad of courses that one could only classify as…well, somewhat extraneous, to say the least. For example:

• The University of California- Los Angeles offers a course entitled “Feminist Geography”, where one can learn about “…gender as spatial process, analysis of feminist geographic theory and methods, landscapes of gender, challenges of representing gender. Spaces of femininity, masculinity, and sexuality.”
• At Centre College in Kentucky, freshman can take a course entitled “Art of Walking”, which focuses on the relationship between descriptions of the sublime and the ancient habit of walking, hiking and pilgrimage.
• St. Joseph’s College in Indiana offers the classic “Basket Weaving 101”, which studies weaving and fiber manipulation using various loom and non-loom techniques.
• Loyola College in New Orleans offers a course on one of America’s great heroes—no not George Washington or General Patton but Harrison Ford— In English 144: Screen Power- Harrison Ford, the Making of an American Hero.
• At the University of Wisconsin, students can forget having to schedule their classes around their favorite daytime soap operas when they take “Daytime Serials: Family and Social Roles”, where they will analyze the themes and characters that populate television's daytime serials.

The question then has to be asked: If today’s colleges and universities have time to waste teaching such absurd courses—couldn’t that time be better spent focusing on fundamental courses that are more pertinent in today’s society? In fact, are the electives that take up the vast majority of students’ time- and parents’ money- really necessary after all?

Years ago, there was no “world wide web” or widespread mass media the way there is today. With the dawn of the Information Age, technologies such as cable TV and the internet have given the average young person today more information at the click of a mouse or the changing of a channel than Albert Einstein ever had access to in all his scholarly years.

Taking that into account, perhaps it is time that today’s colleges and universities begin reevaluating what knowledge and technical skills are demanded of individuals by real world institutions, and adjust their curricula accordingly—as well as their required credit units.

According to UCLA’s Undergraduate Course Catalog, students must take total of 180 credit hours, 45 of which must be from their field of study, in order to graduate. If a student at UCLA takes an average of 15 credits a semester (five courses) it would take them six years to graduate, assuming they only took classes in the fall and spring semesters.

Now, at $44,158 a year—including room, board, tuition and fees— that comes out to $264,948. Consider this: If a student were only required to take courses pertinent to their field of study- sorry, but that means no Feminist Geography- it would only take them three semesters and only cost $66,327—a 75 percent savings.

And the savings don’t end there. According to UCLA’s campus paper The Daily Bruin, students at UCLA only pay 30 percent of the cost of education at the university- meaning the taxpayers of California subsidize the other $103,035 it costs to educate one student per year at UCLA. Therefore, if the above curricula reform were enacted just at UCLA alone, it would save California taxpayers on average $1.5 billion a year.

The bottom line: If California—and taxpayer-supported institutions of higher learning nationwide—are at Mr. Reed’s “crossroads,” perhaps it is high time to allow students (and their parents who often foot the bill) to find a shorter, cheaper route to the end of the line.

ALG Perspective: Some may call the idea of eliminating most of today’s college course electives and moving towards full two-year degrees “heresy”. But, those, most likely will be tenured professors who like the four-year ride. In short, it’s time to take a serious look at the cost—and effectiveness—of today’s university culture.

Lessons from the Big Screen


Will the real Schwarzenegger please stand up? This is getting confusing.

Earlier this year, with California facing a $16 billion deficit for the upcoming fiscal year, Governor Arnold Schwarzenegger (R-CA) proposed 10 percent across-the-board budget cuts. In presenting his ideas in February, he stated:

“There will be no raising taxes, because we don't have a revenue problem, we have a spending problem and we have a budget system problem.”

Predictably, California Democrats want to raise taxes. As noted by the Mercury News:

“…Democrats declared the plan dead on arrival in the Legislature, and said that the size of the budget shortfall demands some boost in revenues…”

This, of course, should have prompted the Governor to declare any plans to raise taxes dead on don’t arrival – reiterating his February pledge that “[t]here will be no raising taxes.” Instead, he has once again been waffling: proposing closing tax loopholes and not clearly taking tax hikes off the table:

“A review of the governor's public remarks on the budget since January point to a politician deeply conflicted over taxes. As recently as February, he took a hard line on the issue…Since then, the governor has struck a more compromising tone, suggesting that ideas such as closing tax loopholes, or applying the sales tax to services currently not subjected to it - such as, say, haircuts and legal advice - should be on the table.

“The governor's recent rhetoric is a stark departure from his more absolutist stance on taxes - an issue that has defined him politically possibly more than any other - during both of his campaigns.”

What makes the Governor’s vacillation all the more appalling is that he is throwing in the towel when he’s way ahead on points. The fact is, by law, the State’s Big Government Democrats cannot raise taxes without a two-thirds vote supporting their onerous demands. As the Mercury News reports:

“Complicating matters is a requirement in California that tax measures get a two-thirds vote of the Legislature, which Republicans insist they will never allow.”

In short, all the Governor needs to do is cut spending, hold the line on taxes – and defy the Democrats to call his hand. As Senator George Runner (R-Lancaster) stated, “You’re not going to get tax increases from this Legislature.”

So, buck it up, Arno. In case you’ve forgotten how, here’s a useful script from your days as the toughest cop in the classroom (just substitute “Democrats” for “kids”):

“(After kids start complaining about ‘police school’.)

“Detective John Kimble: Oh, come on.

“(Kids shout.)

“Detective John Kimble: Stop whining. You kids are soft. You lack discipline.

“(Kids shout.)

“Detective John Kimble: Well, I’ve got news for you. You are mine now. You belong to me.”

ALG Perspective: The way California’s system is structured, Governor Schwarzenegger should be able to make necessary cuts to State spending without raising the tax burden in California. He should up the ante. He already has a trump card with the Assembly’s Republicans, and could even threaten to veto any tax increases (which probably will not pass the legislature anyway). He should be negotiating from a position of strength, not from a position of conciliation.

Schwarzenegger Breaks No New Taxes Pledge


“There he goes again” – Governor Arnold Schwarzenegger (R-CA) has once again molted. This time, according to the LA Times, the “Terminator mutatum Vacillator” has shed his campaign pledges not to raise taxes:

“Addressing a community forum at a breakfast in downtown Los Angeles, the governor said he would like to raise as much as $2.5 billion in new revenue by closing ‘tax loopholes.’”

Of course, Schwarzenegger was not specific about which tax breaks he would eliminate, but boldly endorsed the framework put forth by Legislative Analyst Elizabeth Hill:

“…I totally agree with the Legislative Analyst’s Office when she says we should look at tax loopholes,” he said. “We should go after those tax loopholes. We need the extra $2.5 billion. This is $2.5 billion we could give straight to education. I am totally for that. We should go for it, and we should do it because everyone has to give something in order to make this work."

Hill’s overall proposal for eliminating tax exemptions, by the way, includes reducing the dependent credit and eliminating the senior credit. In short, the one-time Last Action Hero will apparently rob the young and gouge the old!

The debate in the State House has begun anew this week in California, with Republicans seeking to hold the line on taxes:

“'We're not going to waver on taxes,' said Assembly Minority Leader Mike Villines, R-Clovis."

When he ran in the recall election of 2003, Schwarzenegger assured California voters that fiscal sanity could be restored to the State without increasing the tax burden. Yet, the plan he endorsed calls for borrowing even more money and raising taxes higher than ever. Which is kind of like trying to sober up by going on a binge: it may make you feel better for a short time, but it only exasperates the true problem.

ALG Perspective: With California’s budget shortfall for 2008 already topping $16 billion, borrowing money and raising taxes to finance this year’s budget are exactly the wrong prescriptions for repairing its broken fiscal house. California is already strapped for cash and these anti-growth policies will only drive more taxpayers away from the State and steep it further into debt, robbing future generations of their inheritance. The best solution to overcome the fiscal crisis in California over the long-term is to expand the tax base by implementing pro-growth policies and paying down the debt, not by borrowing money and raising taxes on those likely to head for the nearest border.
 
© 2008 GETLIBERTY.ORG, AMERICANS FOR LIMITED GOVERNMENT