Our View: No more ‘no new taxes'?

For Californians who believe their money belongs to them, and that state government already has squandered enough of it, there was a bad sign last week.

In what may be the first chink in Republican armor, state Sen. Bob Margett of Diamond Bar said aloud what GOP legislators, so far, had not.

"I don't think we are going to get there," Margett said of resolving the state's budget problems, "without some sort of tax modification. The vehicle license fee is in that realm, so is that proposal of the tippler tax — a nickel for every drink. ... I think you would probably find Republicans saying we have no other route to take."

Liberal Democrat Senate leader Darrell Steinberg characterized Margett's words as "a very positive signal." Ouch.

Republican legislators uniformly have opposed increasing state taxes, despite growing fiscal troubles, estimated to be a $28 billion budget deficit over the next 20 months, plus $22 billion annual deficits for four years beyond that.

Gov. Arnold Schwarzenegger, not party to the no-tax pledge, last legislative session unsuccessfully proposed new taxes. This month he called for increasing the sales tax 1.5 cents for three years and expanding it to service industries, implementing a tax on in-state oil extraction and imposing a 5-cent increase in alcohol excise taxes. The state legislative analyst next suggested increasing the vehicle license fee.

All this tax talk can be traced to an erroneous assumption and a flawed execution. First, tax hikers assume every dime the state spends should be spent. But state government has expanded into areas it has no business going. It is not the state's responsibility to medicate, educate, house or feed residents. Every intrusion into these areas discourages private responsibility and unfairly competes with private providers. This is the bailout mentality writ large. It is a preemptive bailout because it doesn't respond to crisis, but instead encourages dependency and perverse disincentives, which create crisis.

Second, the profligate Legislature and spendthrift governor have overextended their overreaching. Not content to merely spend on things they shouldn't, they overspend on things they shouldn't. Grossly inflated public employee salaries and benefits are examples. The compulsion to obligate future taxpayers with bonded debt to feed today's insatiable spending appetite is another. The question is whether operating deficits will sink the system before bonded debt does.

These abysmal stewards have mismanaged until, even as clever as they've become at it, they now are hard-pressed to feed the beast they created.

Republican legislators, who share blame for every tax-and-spend dollar they approved, at least lessen the damage with their no-tax stance. We hope Margett, who was traveling abroad and whose term in office expires this month, doesn't hint at what's to come. Republicans should hold to their no-new-taxes stance and pare down bloated government to something reasonable.