Open Letter to Governor Jerry Brown

I heard your voice on the radio saying that if more cuts are needed, they will come from education because “that’s where the money is!” The reference was to the oft-quoted answer to the question, “Why do you rob banks?”

That little joke, right there, points to the heart of our budget disasters and to the thinking that keeps the disasters in place.

Where is the money? In cuts to public education? In cuts to welfare and childcare? No, the money is in the hands of the super rich. Not in public schools where California’s spending is near the bottom of all the states.

Every single time that you speak about the budget you have a chance to improve the system, or not. You and your Democratic Party colleagues hold huge majorities in both houses of the legislature and 100% of the statewide offices from Governor to State Controller to Insurance Commissioner. Every time you speak and do not condemn the two-thirds majority required to raise taxes, you are selling out the 99% and pandering to the 1%.

I cannot wait until representatives in Sacramento – the current batch or new ones we will elect – catch up with the rest of us. Led by the young people of Occupy, the social movements have shifted from the plea of “Stop The Cuts” to demanding the solution, “Tax The Rich.”

Statistics are readily available to explain to people who love old Prop 13 and its two-thirds vote requirement that their love is misplaced and unrequited.

Explain that California has 94 billionaires with a total wealth of $311 billion. Only 10% of that wealth would close the budget gap. Although it would be a hardship for 6 people since they would no longer be billionaires, and would only have $900 million, they would probably get it back within a year. California would not have to cut welfare, childcare, and schools.

Explain how our tax structure is upside down. As updated every year by the California Budget Project, when you look at family income and all state and local taxes, not just income tax, the poorest 20% pay a higher tax rate than the richest 1%. Families who average $12,600 pay 11.1% and those who average $2.3 million pay 7.8%. That’s where the money is. Wealth like that used to be taxed at higher rates, and in those times people could still get richer.

Explain that a bipartisan budget agreement in favor of the 99% is a fantasy and will never be reached when slightly more than 1/3 of California legislators have signed a pledge that they will never vote to raise taxes. The 2/3 requirement gives that 1/3 minority veto power over taxing the rich. The only bipartisan budget agreement operating right now is the silence about the rotten parts of old Proposition 13.

You were Governor in 1978 when Proposition 13, with all of its damaging unintended consequences (unintended by the voters), was voted into law. It is only fitting that you should undo its damage now.

Sincerely,

Laura Wells

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Who Are Our Champions?

This question from the audience stood out for me more than any other question when I attended the California Budget Project’s 2011 policy conference last March. Sacramento was two months into a budget process that looked like it would be cuts-only, again.

Who Should Be Our Champions?

The 99% in California should be championed by the leadership of the Democratic Party. The people voted Democrats into 100% of the statewide offices (Governor, Lt. Governor, Secretary of State, Attorney General, Controller, Treasurer, Insurance Commissioner, Superintendent of Public Instruction); both U.S. Senate seats; and big majorities in both houses of the state legislature.

Democratic officials should stand together and go to the people who elected them, not to the Republican elected officials who were elected into only 35% of the seats in the Assembly, and 37.5% in the Senate. Almost all of them signed the [Rich] Taxpayer Protection Pledge to never raise taxes no matter what.

What Could Champions Say?

The huge Democratic majority could stand together and tell Californians what politicians have avoided telling us for more than 30 years. Proposition 13 had a rotten part that has hurt California and especially our young people. The 2/3 majority to raise taxes has helped us become a state with 85 billionaires, all the while schools, parks, libraries, water and transportation systems are declining. The 2/3 majority to raise taxes created a situation where the 1% highest income households pay a lower rate of their income in state and local taxes than the bottom 20%.

Education or Excuses?

By education, I mean education both for our youth, and for ourselves so we can improve our situation. By excuses, I mean using the Republican Party as an excuse, instead of using the bully pulpit and all possible power to change the rules and stop granting a small minority veto power over taxing the rich. Will we get education, or will we get excuses and cuts-only budgets, again?

Voters voted in old Prop 13 in 1978. Let’s get educated about the problems Prop 13 brought us and our kids, and let’s vote the rotten parts out.

SOURCES:

85 Billionaires in California

http://www.city-data.com/forum/california/1385158-85-californians-named-among-forbes-400-a.html

Tax rates of the richest 1% vs. poorest 20%

Go to http://www.cbp.org/publications/state_taxes_land.html and click on “Who Pays Taxes?”

Taxpayer Protection Pledge, also called the Grover Norquist pledge

“I, [   ], pledge to the taxpayers of the [   ] District of the state of [   ] and all the people of this state that I will oppose and vote against any and all efforts to increase taxes.”

Safeguard for You? Two-Thirds Majority to Raise Tax

Often when I talk about my wish to get rid of Prop 13’s requirement for a 2/3 majority legislative vote to raise taxes, the word “safeguard” comes up. I hear people say, “You want to do that? I thought needing a 2/3 vote was a safeguard to keep the government from raising our taxes too much.”

That’s a reasonable thought process. Consensus decision-making, with a back-up of super-majority vote, has a long tradition, and is being continued today in the Occupy Movement. It works when a group of people have basically the same agenda, and need to make decisions about how to implement that agenda. However…

How the 2/3 Majority Plays Out in California

California was the only state that required a 2/3 majority to both raise taxes and pass a budget.

The 2/3 requirement to pass a budget was instituted in 1933. Since there were golden years for California’s educational system and employment opportunities in the decades after 1933, apparently the 2/3 majority needed to pass a budget was not a big problem.

The 2/3 requirement to raise taxes was instituted after property-tax-flattening Proposition 13 passed in 1978. A simple majority was kept in place, however, to lower taxes. That resulted in a “ratcheting” effect and a long unlucky streak for California’s schools and opportunities.

In boom years, taxes were lowered with a simple 50% + 1 majority vote. Californians are well aware that the main beneficiaries of lowered taxes in boom years were the 1%, not the 99%. And we’re aware that the 1% is the political donor class, so some of the money kept from taxes went to legislators in the form of campaign contributions. In lean years, we can’t get the revenue back, because it takes a super-majority 2/3 vote.

One 2/3 Majority is Eliminated

In November 2010, a proposition passed to eliminate the 2/3 requirement to pass a budget. A future blog on Bad Budgets Faster will tell behind-the-scenes details about the 2010 movement to eliminate both 2/3 requirements, including how then-Attorney General Jerry Brown impeded the drive to eliminate the 2/3 requirement for raising revenue. We’ll also cover what kinds of taxes do get passed, and which do not, as well as the “Taxpayer Protection Pledge” which should of course be named the “Rich Taxpayer Protection Pledge.”

There are solutions, we need to remember that, solutions including publicly-owned banks like a State Bank and getting rid of the 2/3 majority to raise taxes. Thank goodness we have a growing number of people working on the revolution of solutions.

More to come!

Crash Course in the California Crash: Prop 13 and the Two-Thirds Majority

You know, it’s my birthday today and I don’t feel like restraining myself, so what if I just let ‘er rip?

Books and articles that focus on the huge problems of California’s government and politics invariably spend a lot of time on good old Proposition 13. I keep trying to come up with a very short phrase to sum up Prop 13 and my latest “slogan” is this: Keep Only the Good of Good Old Prop 13. Here is a two-part definition, the first is more commonly known, even among the youth, who were born after it was passed, and who happen to be on receiving end of its unintended detrimental consequences. That part is “the Good.” The second Part, not so commonly known, is the ugly.

Definition Part I

Proposition 13 was approved by voters in 1978. The voters were sold Prop 13 as a way to solve the problem of seniors losing their homes due to rising property taxes.

Definition Part II – Not So Commonly Known

Proposition 13, in addition to flattening property taxes, “Requires 2/3 vote of Legislature to enact any change in state taxes designed to increase revenues.” (This statement is from the official ballot pamphlet. I point this out because many highly political people do not believe me when I say the 2/3 rule on taxes came in with Prop 13.)

Prop 13 also centralized control of budget and finance, so that cities and localities had less direct control, and Sacramento had more control.

Safeguard?  Governor Brown’s Budget-Busting Role?

These topics will have to be in my next blogs because I’m due at a birthday brunch for me and so I should get going, eh?

Peace and love and all that good stuff,

Laura

New Year Wishes for the California Budget

Here are my two big wishes for the California budget. The real bottom line is to create a better than ever California, with justice and peace, great schools, environment, and jobs. The challenges are huge, but the Occupy Movement has inspired real hope, and the movement will not stop. My wishes:

One: Begin to get rid of the 2/3 majority vote requirements for raising revenue. My wish is that 2012 will be a banner year for increasing people’s awareness of how the 2/3 requirement has handed a small minority veto power over taxing the rich, and has kept in place an excuse-ridden system that produces cuts-only budgeting in our wealthy state. Voters can fix this.

Two: Begin to implement publicly-owned banks in California. My big wish is for a State Bank to be established, so that it will partner with local banks and credit unions; provide good loans to homeowners, small businesses, and students; and invest in California not Wall Street.

My part in all this? By running for statewide office as a Green Party candidate I’ve become more and more expert on the process of the budget. I plan to share my expertise and insights in every way I can.

Post a Blog-a-Day on the Budget

As we enter January 2012, my goal is to blog frequently on the budget. January is the month the annual budget process (fiasco!) begins in California. The Governor is required to introduce a balanced budget proposal by January 10, and the Legislature is required to pass the annual budget bill by midnight on June 15.

Provide a Voice for Budget Solutions rather than Budget Excuses

We’re setting up speaking engagements and interviews at colleges, on radio and TV, and every other medium possible, How can you help? Post your questions and comments; provide speaking opportunities; and spread the word so people know we can have a “revolution of solutions.”

Another California is possible.

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