PCOC - Fall 2010 - (Page 29)
Is There No End in Sight?
By Curtis Good PCOC Legislative Chairman
The latest version of California’s democratic legislators’ 2010 budget, being called the “Jobs Budget,” does a poor job of creating anything but shortsighted tax increases. The plan calls for a $4.7 billion tax increase and a permanent, 1 percent point increase for every personal income tax bracket (P.I.T.), except for the very top income level. The “Jobs Budget” is also a retroactive tax, taking effect in the fourth quarter but taxing personal income for all of 2010. If the plan contained strategic objectives for creating new, long-term employment opportunities and not a rush to a large, retroactive tax increase then it might live up to its name, but it clearly does not.
New Tax to Focus Solely on Corporate Tax Revenue The new budget proposal also contains a new “severance tax,” a 10 percent tax on the value of all oil produced in California, making our oil the most severely taxed in the nation. This will undoubtedly be passed to consumers who are already struggling to fill their tanks and result in potential job cuts in oil producing communities throughout the state. even further than the national average of 5.2 percent. Housing prices in California have also fallen more than any other state in the U.S. Current data may suggest that job loss rates in California have subsided slightly, and the U.S. economy may be on the mend, but our state’s residents need jobs, not taxes. Suspicious Tactics and Statistics In addition to the $4.7 billion in tax increases, the “Jobs Budget” claims to contain $8.3 billion in spending cuts which actually is a refreshing change! However, it also assumes $4.1 billion in federal fiscal relief money and a $1.4 billion boost in existing revenue streams based on a “projected” improvement in the state’s economy. The plan also proposes a suspension in Proposition 98 (School Funding) which they say will guarantee a $3 billion increase in revenue that can be used for other General Fund purposes. The package also shifts and borrows an additional $2.7 billion from various sources.
www.pcoc.org / Fall 2010
Current data may suggest that job loss rates in California have subsided slightly, and the U.S. economy may be on the mend, but our state’s residents need jobs, not taxes.
California’s Economy Under the Pressure of More Taxation The current recession hit California fi rst and still appears to be heading in the wrong direction with respect to new jobs. State employment totals have dropped 6.6 percent since peaking in 2007, falling
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It is quite troubling to see legislators once again using one-time money earned with hurried, retroactive taxation, as a means to fund ongoing, long-term programs. Even if their best-case scenarios all come to light, the federal fiscal funding arrives as promised, and our state’s economy picks up significantly, our budget will be right back in the same predicament 12 months from now. If state legislators continue to use taxes as their main source of economic stimulus then there may truly be no end in sight for the problem of creating new jobs in California.
Table of Contents for the Digital Edition of PCOC - Fall 2010
PCOC - Fall 2010
PCOC’s 2010 Convention and Tradeshow Highlights
Change or Be Changed by Change
Haiti Relief – More Important Than Ever
State Capitol Report
Index to Advertisers
PCOC - Fall 2010