Assemblyman Guy Houston, R-San Ramon, sent over his favorable opinion (see it below) on the draft state budget that lawmakers passed earlier this week after months of delays and bickering.
Houston may be the last remaining Republican in a partisan seat in the Bay Area, but his view runs counter to that of GOP Gov. Arnold Schwarzenegger.
The governor has said he will veto the budget in an unprecedented move, calling its reforms inadequate to deal with the state’s long-term deficit. The Democrat-controlled Legislature vows to override the veto. And the governor says if that happens, he will veto all those bills still sitting on his desk.
Here’s what Houston wrote:
Why We Did Not Raise Taxes and Why That is the Right Thing for California
Why would raising taxes be the short-sighted, ill-conceived way to close our state’s budget deficit? – because you already pay too much!
The Legislature finally passed a budget at 3 AM on September 16th, although Governor Arnold Schwarzenegger promises to veto it. The compromise budget did not include any new taxes or tax increases, instead responsibly relying on $9.6 Billion in spending cuts.
When I was elected to the State Assembly in 2002, the 2003-04 budget included $71 billion dollars in General Fund spending. As I wrap up my last year in the Assembly, the 2007-08 budget grew to $103 billion-a 31 % increase in just six years.
Fact: The budget fully funds education at Proposition 98 levels.
I keep hearing that education funding is starved, yet over the past six years, education spending has increased over $27 billion-from $30 billion in 2003 to $57 billion in 2007. And since 2003, California’s K through 12 public schools educate 50,000 less students due to declining enrollment.
According to the National Education Association, California ranks 22 in per pupil spending in the nation and number one in teacher salaries. The proof is that over my six years here in Sacramento, Governor Schwarzenegger and the Legislature have made education a priority.
Fact: Californians already pay some of the nation’s highest tax rates.
Californians pay the nation’s highest personal income tax, sales tax, and capital gains tax rates among the 50 states. If you still think you aren’t paying enough in taxes, here’s another example of how much you fork over every day.
If you are purchasing gas in Alameda County, where sales tax is 8.75 percent, a $3 gallon of gas includes 18 cents for federal excise tax, 18 cents for state excise tax, 14 cents for state sales tax, one cent for bond debt payment, and 10 cents for local taxes, totaling 61 cents in taxes per gallon. The actual cost of a gallon of gas is only $2.39-so you’re paying a 25% tax on every gallon you put in your car.
Fact: Californians lose jobs when taxes go up.
When we raise taxes on conducting business in California, we don’t just drive business out of state. More importantly, we drive good-paying jobs out of the state. Where are we losing them? Not just other countries, but other states like Mississippi and Oklahoma.
AAA and Toyota will be relocating to these two states. They announced in July they were closing down shop and expanding elsewhere because of the high cost of doing business in California-a loss of almost 8,000 high paying jobs.
California already has the seventh and eighth highest corporate income tax and corporate capital gains tax rates in the country. Neighboring states like Nevada and Washington don’t have either-at all! There truly exists competition for jobs in this country and throughout the world, and we lose our edge when we raise taxes. When I arrived in Sacramento in 2002, our state’s GDP earned us the distinction of the fifth largest economy in the entire world. In my six years here, we’ve dropped to eighth.
Fact: This year’s budget is a responsible way to close our deficit.
I have voted for a budget that has included no new taxes each of my past six years in Sacramento. This is because Californians do not deserve to be punished for their productivity, their entrepreneurship and their creativity.
Difficult decisions were considered, and serious sacrifices were made as we struggled to close a $15 billion gap in our state budget. The compromise that was crafted was by no means perfect, but it kept our promise to not borrow funds from local governments or transportation, it eliminated the dangerous proposal to release convicted felons from prison without serving their full sentence, and it fully funds education with a $400 million increase from last year’s levels.
Governor Pete Wilson raised taxes in the early 1990’s to close a budget deficit and he will tell you today it was the biggest mistake he ever made. That decision extended the California economic recession by two years with tens of thousands of Californians losing their jobs. We are fortunate that history did not repeat itself in 2008.
Assemblyman Guy Houston represents the 15th Assembly District, which includes portions of Alameda, Contra Costa, Sacramento, and San Joaquin counties.