Steven Greenhut: 'Think Long' report comes up short
Could California be in better shape if former governors Arnold Schwarzenegger or Gray Davis, or former Assembly Speaker Willie Brown were back in power? That's an odd question given the fiscal mess that those politicians helped create, or at least were powerless to fix.
These politicos had their chance at the pinnacles of power, yet they blew it. Schwarzenegger was elected in a historic recall, yet he left the state in a more precarious position than when he assumed power. Davis and Brown were advocates for the big-spending, pro-public-sector-union policies that turned California's government into a bloated mess. No one in the media would champion returning these former leaders to power. Yet the media are championing a new "Blueprint to Renew California" based on the year-long work of a commission dominated by these and other has-been politicians.
The report, released Nov. 21 by the Think Long Committee for California, purports to provide out-of-the-box solutions. The committee is a who's who of the California political establishment. Members include Davis and Willie Brown and included input from Schwarzenegger, Jerry Brown and Lt. Gov. Gavin Newsom. One won't find many real reformers in the bunch.
The only thing sillier than expecting this group to fix what ails California is the big idea unveiled by the committee, which amounts to a $10 billion annual tax increase on California residents. After a year, the best it could do is come up with a plan based on the same failed ideas that are fashionable in the Capitol all the time — hiking taxes on ordinary Californians to spare the state bureaucracy the pain of the cutting knife.
That isn't thinking long. It's thinking small. The most dangerous idea is a proposal to place a sales tax on every service in the state except for health care and education. That will mean that the cost of living here will go up, as everything from haircuts to lawn services will carry an additional tax. Even if the tax starts small, it will grow, given the spending tendencies typical in this state's governments. The plan would eliminate most income-tax deductions, not including the mortgage deduction and a few other exemptions.
Sales tax rates would drop slightly as would corporate tax rates. But virtually everyone would pay more in their overall tax bill although the reform would reduce income taxes for wealthier Californians. The committee would end the Proposition 98 guarantee that 40 percent of the state budget go to K-14 education, but then it promises the school establishment an increase in education funding from other sources. There's no talk about educational choice or reform.
The committee plans to place two initiatives on the November 2012 ballot, backed by billionaire financier Nicolas Berggruen. He is the latest in a long line of wealthy folks who come up with "state-saving" plans that end up taxing us more and rearranging the arm chairs around the 1,000-pound gorillas in the living room.
The committee's 23-page report also includes some detailed suggestions for improving the state government and reducing gridlock. Some of the ideas are OK as far as they go, but they rarely challenge establishment thinking. The report mentions the unsustainability of public-sector pensions but offers the lamest solution: "We recommend that the governor, legislature and local government officials make it the highest priority to work with public employee unions to find ways to address the long-term costs of pensions and the unfunded liabilities that have already been built up." Thanks very much for that great advice! The commission spent a year coming up with detailed ways to increase taxes, but the best its members could do on the pension crisis is to call on officials to work with reform-averse unions to come up with unspecified reforms.
The committee proposes the creation of a "Citizens Council for Government Accountability," a toothless good-government body with amorphous goals. The committee would be "an independent, impartial and non-partisan body" that would "develop a vision encompassing long-term goals for California's future." This council would "be tasked with charting, coordinating, shepherding and sustaining an integrated strategy … aimed at creating educational excellence, world-class infrastructure, environmental quality" and blah, blah, blah.
There's no call for reducing government or creating competitive pressures on the monopoly systems that provide state services so poorly. If this council is populated by the same type of folks who populate the Think Long Committee, we will find yet another arm of government devoted to higher taxes and bigger government.
Some of the committee's budget and oversight reforms are fine, but of the insufficient variety that short-thinking reformers always come up with — multi-year budgeting, a rainy day fund, a two-year-legislative session, pay-as-you-go legislation and a modification of term limits.
The committee wants to use the initiative process to implement its ideas, but also wants to reduce the ability of ordinary California voters to use the initiative process for themselves. The committee "supports a constitutional amendment to allow the Legislature to review pending initiative proposals and to fix flaws." Not only is this elitist — the Legislature knows best! — but it's dishonest. The Legislature would gut those initiatives it doesn't like (i.e., anything that limits taxes or government power). The committee also wants to increase the number of signatures needed to qualify an initiative for the ballot.
There's other discussions about "accelerating" the environmental review process, and for spending more money on the state's admittedly dilapidated infrastructure and for higher education. Yet the establishment thinkers behind this report don't recognize the inflationary affect of government spending on educational costs or the degree to which California's infrastructure has crumbled because government has been misspending its vast resources.
If this is thinking long, then I'd hate to see the group's short-term proposals.