Death and taxes

— Rollie Atkinson
We might as well get the bad news out of the way before the year
gets much older. This year of 2010 will be a very “taxing” year on
all of us. If we do not accept this inevitable fate, then we must
choose the “death” of such government services as Cal Grants for
college students, in-home health services for the elderly,
classroom size reduction for K-3 students and total elimination of
the CalWORKS jobs program and the state’s Healthy Family
Program.
None of us like to pay more fees and higher taxes. But our local
schools and governments are spending all their reserves and the
governor has “promised” to take millions more away from our local
schools, cities and county. The State of California is facing a
$19.9 billion budget deficit — a deficit that now seems
permanent.
We are told the Recession is ending, but any noticeable economic
recovery is still a long way off. If we want to launch new job
creation programs, fast-track business expansion and preserve the
basic weaves to our public safety net for children, the elderly and
low income families we will have to find the money to pay for
it.
This week at the annual Sonoma County’s “State of the County”
breakfast UCLA economist Dr. Jerry Nickelsburg predicted there will
be “more contraction to come” for local government and retail
activity. He told the county’s movers and shakers that our
construction, hospitality and manufacturing activity will “stay
flat” and only healthcare and professional services will show any
near-term growth.
Newly installed Board of Supervisor Chair Valerie Brown told the
same audience that the new year of 2010 will look a lot like last
year, with wage freezes, possible furloughs, state government
takeaways and more trimming of public services.
From the county’s breakfast to the Governor’s “State of the
State” address last week to most of the published reactions, no one
is mentioning the “tax” word. Yet, at the same time, there is no
audible support for Gov. Schwarzenegger’s call to cut $6.6 billion
in health and human service programs, a permanent pay cut for all
state employees, more reductions to K-14 spending and reducing
Medi-Cal benefits.
Sorry folks, but taxes look inevitable. Facing the fiscal
reality in California for our schools, roads, health clinics and
courts would tell us that not just taxes, but tax increases are
inevitable.
Agree or disagree, but we believe some taxes are actually good.
And we believe we need to increase some taxes right now to save the
“death” of vital local programs and services, especially in our
schools.
During the Recession, we all have actually been paying fewer
taxes because we have been making fewer taxable purchases. Many of
our property taxes are being adjusted downward, leaving local
governments with revenue shortfalls and broken budgets.
Local governments are faced with dipping deep into their budget
reserves because sales tax revenues are down by 22 percent and
corporate tax receipts are down 28 percent.
The state’s unemployment fund is now $4 billion in the hole and
actual tax collections are behind by 14 percent.
Don’t look now, but we see the tax man coming this way. If we
meet him half way we might find a plan in the Democrat-led State
Legislature to guarantee any new taxes and collected revenues get
returned to us instead of being buried up in Sacramento.
Last year a Commission on the 21st Century Economy delivered a
long list of tax reforms and budgeting fixes to the governor and
the State Legislature. To date, none of them have been considered
or implemented.
All this inaction will lead to a scenario of mounting debt,
public employee distress, small business anxiety and wider spread
economic gloom. And, ultimately more taxes.
It’s better than death, but not by much.