DeVore: Will California tax revolt sweep the nation?

Written by CA Political News on June 02, 2009, 09:55 AM

Will California Tax Revolt Sweep the Nation?

by Assemblyman Chuck DeVore, Human Events, 5/26/09

In 1978, Californians were saddled with the third-highest tax burden
in America. In a massive grassroots uprising, California voters
passed Proposition 13, placing limits on property taxes and the
ability of the legislature to raise taxes. In large measure, Prop.
13 catapulted former Gov. Ronald Reagan into the White House in
1980.

On May 19, California voters rejected five ballot measures aimed at
allowing California to continue its overspending ways. These
measures were designed to bring in an additional $6 billion in
short-term revenue and $16 billion in additional taxes to close a
massive budget deficit. Voters nixed Prop. 1A, the most important
proposition, by almost a two-to-one margin. Prop. 1A was a
two-headed monster that sought to extend the largest state tax
increase in U.S. history for two years while enacting a weak and
loophole-ridden budget-leveling tool that proponents touted as a
"spending limit," despite its being nothing of the sort. Gov.
Schwarzenegger and the four legislative leaders, the "Big Five," put
Prop. 1A together with only Sacramento interests in mind, thinking
the public sector unions that might be afraid of even a modest
budget restraint tool would be bought off by the prospects of higher
taxes. It mostly worked, with some unions enthusiastically
supporting Prop. 1A and only a few opposed. But the Big Five forgot
the most important special interest: the voters.

In spite of spending $26 million to bully and warn Californians into
approving the five propositions, with opponents marshalling only $4
million, every budget-related proposition lost with the strongest
showing a pitiful 37.4 % "yes" vote for proposition 1B, a measure
heavily backed by the powerful California Teachers Association
union.

Now California lawmakers are struggling to spin the results of the
May 19 special election. I was on NPR with Senate President pro Tem
Darrell Steinberg (D-Sacramento) the day after the election as he
labored to claim that the Tuesday vote was all about frustrated
voters, worried about their jobs who simply want the legislature to
do its job and not pass the buck to them. He rejected my contention
that the vote was an anti-tax vote.

But election-eve polls tell a different story, with California
voters seeing themselves as over-taxed and very desirous of cuts in
state spending. Polls are nice, but actual votes are better. While
Prop. 1A lost by almost 32 points, it lost in fiscally conservative
Orange County by almost 53 points while, in the early returns, it
was passing in only one of California's 58 counties: San Francisco.
In the end, the most liberal California county, San Francisco, was
the kindest to Prop. 1A, turning it down by barely more than six
points. A 50-point spread in votes between Orange County and San
Francisco County cannot be explained away by Sen. Steinberg's
attempt at damage control spin. Instead, this vote might be the
opening shot of the great 2010 tax revolt.

California now faces a $21.3 billion deficit over 15 months, with
general fund revenues projected to be about $86 billion in 2009-10,
down from $102.6 billion in 2007. Democrats face an interesting
dilemma. They can do one of three things:

* Do they reform government, trimming unpopular expenses, such as
the state's bloated welfare rolls with California spending three
times the national average on welfare due to our overly loose rules
regarding work requirements and aid to illegal immigrant families?

* Do they slash and burn popular programs such as education and law
enforcement?

* Do they try another end-run on the state constitution, enacting
billions in new taxes with a simple majority vote by simply
declaring them to be "fees"?

Based on my discussions with Democratic lawmakers, I do not expect
any attempt at meaningful spending reform. Rather, dramatic
reductions in popular programs such as K-12 education and law
enforcement seem more likely, with the Democrats in the mood to tell
the voters: "These painful cuts are the result of you voters voting
against higher taxes." If the public sector employee unions mobilize
against this move, then the final outcome may well be another
massive tax hike masquerading under the legal fig leaf of "fees."

Either outcome would likely see California voters, recently
mobilized under the banner of more than 50 anti-tax tea parties in
April (I had the honor addressing the tea parties in Pasadena and
Modesto), organizing to make 2010 a repeat of the historic 1978
election by qualifying new tax and spending limitations for the
ballot. Were that to occur, it would shake the foundation of the
political establishment from the Pacific to the Atlantic.

Of course, this would be highly problematic for President Obama and
the Democrats in Congress. Thus, as much as the rest of the nation
would be opposed to bailing out California, Obama may see California
as "too big to fail" and come to the Golden State's rescue with
another $20 billion of freshly printed Federal Reserve notes. This
may take some of the steam out of the tea party movement in
California, but may ignite a larger national effort as a
consequence.

California generates 13% of America's economy. Its economic success
or failure will largely determine the success or failure of the
Obama presidency.

Through Hollywood and politics, California shapes America for better
or worse. California's deep budget crisis present may portend
America's budget crisis future -- just as the grassroots reaction to
that crisis in California may stop massive government growth in its
tracks as Prop. 13 did for California and America 31 years ago.


Mr. DeVore (R.-Irvine) represents 450,000 people in coastal Orange
County's 70th Assembly District. He retired as a lieutenant colonel
after 24-years of service in the Army National Guard.