Staying informed post 11-4-08

SAN BENITO REPUBLICAN PARTY
News of Interest

CALIFORNIA’S BIG DEFICIT

May 29 – The pending budget battle in Sacramento will be even bigger now that the voters said NO to extended taxes. The Sacramento Bee has a story HERE.

TAX TARGETS

March 17 – Our legislature in Sacramento recently passed the budget bill that included temporary tax increases. On May 19, they want us to extend the taxes in a special election. In addition, the Democrats in Sacramento have TAX TARGETS for special revenue streams. Check to see if your on the target list HERE.
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RAISE TAXES, TAXPAYERS LEAVE

December 31 – The legislature in Sacramento is still trying to come up with a solution to the budget deficit. It seems only Democrat proposals are being considered. That is to raise taxes with token spending cuts.

One item of spending the Democrats have proposed cutting is to remove $60 million from the ‘Trial Court Improvement Fund’ and transfer it to the General Fund. Want to guess how this will impact the San Benito County Court House Project?

How about raising the tax on the rich? Looks good on paper.

Remember Proposition 63 (2004) that imposed a 1% tax on individuals with income over $1 million? The California counties of Los Angeles, Orange and San Diego ranked 1st, 4th, and 6th for the highest number of millionaires in the entire country. However, even as the national population of millionaire households grew by 5.9% in 2007, Los Angeles County lost about 7000 of these households. Orange and San Diego Counties lost millionaire households as well.

Maricopa County, Arizona gained 23,000 new millionaire households in the same time period. Arizona's top marginal personal income tax rate is 4.79%, less than half California's rate of 10.3%, which includes the Prop. 63 surcharge.

It seems millionaires vote with their feet.
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HOW BIG IS THE DEFICIT?
December 14 – According to the San Francisco Chronicle, the California budget deficit will be over $40 billion over the next year and a half. The Chronicle and Governor Schwarzenegger blame the Republicans for not going along with the Democrats proposal to cut spending and raise taxes.

Both ignore the Republicans proposal to cut spending (more than the Democrats want), raise taxes (less that the Democrats want), and relax some state regulations that would make business more flexible. Two examples include overtime for over 40 hours per week, or 80 hours for bi-weekly period, not for over 8 hours per day, and allow flexibility in meal breaks. The labor unions oppose any change in work rules that allow business more flexibility. Therefore this proposal was dead-or-arrival in a legislature controlled by the Labor, that is, Democratic Party.

An editorial in the San Diego Union-Tribune notes the $40+ billion deficit assumes the same-old-same-old spending habits as before. That is, it assumes a $7 billion increase in spending next year. It also ignores a $4.5 spending cut proposed by the governor for this year.

By counting the spending cut and no spending increase, the potential deficit is $22 billion, still a staggering sum but not as sensational as $40 billion. That gap would be easier to close with more spending cuts and a modest tax increase, with work rule changes.
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Paid for by
San Benito County Republican Party
PO Box 271
Tres Pinos, CA 95075
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