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Deukmejian and State Funds

November 13, 1987

Your article on the state's Gann limit (Part I, Nov. 2) clearly presented the impact of this spending limit on state and even local services. You also showed how Deukmejian has hidden the spending limit to justify cutting funds for public education.

However, your article failed to explore how excess revenues are being rebated and what alternatives to those rebates were possible. "The check is in the mail!" We will soon see the results of collecting more revenues than the Gann limit allows the state to spend--income tax rebate checks.

Next spring when we file our federal tax returns, we will then discover that what Sacramento gives Washington takes away--the income tax rebate is taxable income.

If a tax rebate were necessary under the Gann limit, it could have instead been as a cut in the sales tax. If a sales tax rebate were in the form of a sales tax reduction, it would reduce the retail costs of goods and improve California's economy. A sales tax reduction would have also avoided the wasteful costs of issuing and mailing rebate checks.

The excess revenue did not actually have to be rebated. Instead, it could have been used to repay some of California's bonds, removing that burden from future taxpayers. The money could also have been transferred to local governments--counties and cities--that had not yet reached their own Gann limits. Budget cuts affecting local services could have been avoided.

Finally, the excess revenues could have been transferred to our public schools so that educational reforms could be continued.

The governor is not interested in who is hurt by cuts in local budgets. He does not care that tax rebates are being funded from future educational mediocrity. All he wants are the votes he is buying with his rebate checks.



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