Calif. voters ready to join tax revolt

Updated 7m ago

By William M. Welch, USA TODAY

LOS ANGELES — Three months after California seemingly averted a state budget meltdown, voters are being asked to ratify billions of dollars in higher taxes that were part of the deal.

So far, voters don't seem to be buying it, a mood that portends trouble for other deficit-addled states whose political leaders are proposing tax hikes as a way out.

"The voters who are really tuned in are really turned off," said Mark Baldassare, president of the Public Policy Institute of California, a think tank. "They see the state's budget situation as a big problem, but so far, they don't like the solution."

Among the half-dozen ballot initiatives facing voters in a special election Tuesday are tax hikes and borrowing measures that are the centerpiece of Republican Gov. Arnold Schwarzenegger's budget plan.

Two polls, one conducted by the Field Poll in late April and another by the Public Policy Institute of California in early May, found Schwarzenegger's proposals trailing badly. Those proposals include a $16 billion extension in sales, auto, income and other tax increases for two additional years while placing a cap on future state spending.

The lone initiative with overwhelming support (over 70%) would deny elected state officials a pay raise in years of deficits.

"It's not just rejection of taxes — it's also a rejection of what the Legislature has done up to this point," said Mark DiCamillo, Field Poll director.

Anti-tax activists see a defeat for taxes here as energizing their effort to spur a national tax revolt.

Nationwide movement

"This is part of the nationwide strategy of the Tea Party Patriots," said Mark Meckler, California coordinator of the anti-tax group by that name, which has organized rallies here and across the country. "This is ground zero in the tax-and-spend heartland."

Nearly every state has a shortfall, and most are considering tax hikes as part of the solution. Among them:

• New York. Considering hiking the income tax on high earners by 35%.

• Rhode Island. Planning to raise cigarette taxes $1 a pack.

• Kansas. Proposing to delay the phaseout of taxes, such as the estate tax.

Each state finds taxpayer groups facing off against public service unions who do not want the deficits closed through spending cuts.

In California, a coalition of the teachers' union and other groups have been airing TV ads supporting some of the ballot proposals, depicting them as imposing spending discipline.

With California's economy in a prolonged recession, unemployment over 11%, and sales and personal income taxes among the highest in the nation, voters don't seem eager to pay more.

State analysts say rejection of all the ballot measures would inflate the $15 billion deficit by another $6 billion for the year beginning July 1.

So what do voters want?

Another Field Poll finds majorities of California voters don't want to see cuts in most categories of government, including the most expensive ones: schools, universities, health care and social services. Majorities backed cuts in only two areas — prisons and state parks — and the state is already under court order to improve prisons.

Deep cuts could be ahead

Schwarzenegger warned Thursday of "really tough decisions" ahead with deep cuts to programs and services, and bigger ones if the ballot propositions fail — including trimming 7.5 days from the public school calendar.

He is proposing selling state land and buildings, among them San Quentin prison and the Los Angeles Coliseum, and cutting thousands of state workers. He's also threatening to release thousands of inmates from state prisons early.

The governor is engaging in "absolute scare tactics," says Jon Coupal, president of the Howard JarvisTaxpayers Association, a group named for the late anti-tax advocate who pushed through Prop 13 property tax limits in 1978.

"What he is trying to do is browbeat California voters into supporting the proposals," Coupal said.

State Sen. Mark Leno, Democrat of San Francisco, one of the advocates of the tax increases, acknowledges the economy makes the timing "horrible for everyone" but says without voter approval, state government problems will spiral.

"To talk about any kind of taxes is a very difficult thing, but we need to have an honest conversation with people," Leno said.

Coupal says the main initiative has weak spending limits and raises taxes $1,100 per year for the average family of four.

The anti-tax leaders say government needs to slash spending across the board.

Coupal says the state should renegotiate generous pensions and other benefits that some public workers enjoy, such as retirement as early as age 50 with 30 years experience.

"Certainly the pensions are something that needs to be addressed," Coupal said. "The question is, does the California legislature ... have the backbone to do that.
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