George Skelton

By George Skelton Capitol Journal
January 16, 2012

From Sacramento– Californians are heading into an intense, critical debate over the level of public service they’re willing to pay for. So it’s time to puncture some myths.

Everyone’s entitled to his own opinion, as the late Daniel Patrick Moynihan used to say, but not his own facts.

Voters owe it to themselves to separate myth from fact as they begin pondering Gov. Jerry Brown’s planned November ballot initiative to temporarily raise about $7 billion annually from higher income taxes on the rich and sales taxes on everyone. It’s either that or deeper cuts in education and other services, the governor warns.

Myth No. 1: There’s no such thing as a temporary tax increase. They all become permanent.

Fact: That’s just talk-show spiel. Temporary state taxes almost never become permanent.

There’s only one exception that I can recall. A temporary half-cent sales tax turned into essentially a permanent local tax in 1993 with the voters’ approval. All the revenue was dedicated to local law enforcement and fire protection.

Myth No. 2: Taxes have gone through the roof in California.

Fact: They’ve been held down. Even if Brown’s tax hikes are approved by voters, the state tax burden will be basically what it was back when Ronald Reagan was governor in the 1970s.

In Reagan’s last year in Sacramento, state taxes amounted to $6.89 per $100 of personal income. Currently, the level is $6.45. With the hikes, it would be $6.67, according to the State Department of Finance, which charts such data. The high tax point was $7.96 in 1999.

Also, according to the finance department, California ranks 19th nationally in state and local taxes and fees, at $16.42 per $100 of personal income. The highest-taxing states relative to income are Alaska, Wyoming and New York.

Myth No. 3: California’s spending has been out of control.

Fact: It’s on a relatively tight rein. The deficit-ridden state General Fund has been cut by 16% in the last four years, the overall state budget by 2%.

One example: Welfare, the poster child of waste for many on the right, has been slashed to the grant levels of 25 years ago: $638 monthly for a family of three.

But let’s go back to that conservative icon Reagan. General Fund spending per $100 of income is lower today, $5.14, than it was in his final year, $5.89.

Historically, what really bumped up state spending was Proposition 13 in 1978. That property tax cut prompted the state to begin doling out money to revenue-robbed local governments and schools.

Myth No. 4: California suffers from an exceptionally bloated bureaucracy.

Fact: That’s baloney. Again, the Reagan era puts it in perspective. State government employs roughly the same number of workers per 1,000 population today as then, nine.

Moreover, we have the fifth-lowest number of state employees relative to population in the nation, according to Steve Levy, executive director of the Center for the Continuing Study of the California Economy. We’re 23% below the national average.

Make that also the fifth-lowest nationally when state and local government employees are combined.

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