NBC: Impediment to Raising Taxes a 'Problem' for California
Though the ballot initiatives turned down by voters on Tuesday involved raising and/or extending an income tax surcharge, the sales tax and the tax on cars, Lewis euphemistically described them as “a series of ballot measures, backed by [Governor Arnold] Schwarzenegger, aimed at easing the deficit.” Lewis concentrated on potential victims: “$5.3 billion would come out of education in the Governor's proposed budget, $2 billion from health programs and hundreds of millions from the state's prison system” while a college student, Lewis paraphrased, complained they “are in a bind as California hikes fees to make ends meet.”
Like Marquez on Tuesday's World News, Lewis ignored how taxes and spending have spiraled upward in recent years. Though personal income tax collections “dropped 14% last year,” a Tuesday Wall Street Journal article noted they “soared 70% from 2002 to 2007.” And columnist George Will pointed out in a May 3 column that the state government has hardly been starving for money: “If, since 1990, state spending increases had been held to the inflation rate plus population growth, the state would have a $15 billion surplus instead of a $42 billion budget deficit.” In addition, in Arnold “Schwarzenegger's less than six years as Governor, per capita government spending, adjusted for inflation, has increased nearly 20 percent.”
From the Wednesday, May 20 NBC Nightly News:
BRIAN WILLIAMS: Now to the American west we go and huge problems for the most populous state in the country. California is pretty much insolvent. $21 billion in the red with depressed tax revenue and bigger expenses because of this recession. Last night, voters said "no" to a plan to try to close this gap. Our own George Lewis has our report.
GEORGE LEWIS: 38 million Californians woke up this morning with their state $21 billion in the red. A big defeat for Governor Arnold Schwarzenegger, in Washington trying to nail down stimulus money from the Obama administration. Voters yesterday turned down a series of ballot measures, backed by Schwarzenegger, aimed at easing the deficit.
GOVERNOR SCHWARZENEGGER: So there was a clear "no" on all of those issues and so now we have to recognize that and move forward and make all of the changes through cuts.
LEWIS: $5.3 billion would come out of education in the Governor's proposed budget, $2 billion from health programs and hundreds of millions from the state's prison system. To further plug the holes in the budget, the state may have to sell off a number of landmark properties including this one, the Los Angeles Memorial Coliseum. Also, the San Quentin state prison, the Del Mar fair grounds near San Diego and the Cow Place arena south of San Francisco. Part of California's problem is that it takes a two-thirds vote in the state legislature to raise taxes, while voters oppose any cuts in services.
BRUCE CAIN, UNIVERSITY OF CALIFORNIA, BERKELEY: Now, with this cataclysmic economic decline we just have a combination that is just unimaginably bad.
LEWIS: The Center on Budget and Policy Priorities estimates in 2010, 47 states will fae deficits totaling $145 billion. Curtis Schlaufman, student body president at Cal State University-Fullerton says students are in a bind as California hikes fees to make ends meet.
CURTIS SCHLAUFMAN: Right I have a part-time job, so I might have to find another part-time job just to be able to afford to pay for my schooling and my books.
LEWIS: This as the fiscal crisis in California and elsewhere deepens. George Lewis, NBC News, Los Angeles.