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The State | CAPITOL JOURNAL

Betting Californians Will Pay for a Better Future

May 12, 2003|George Skelton

SACRAMENTO — State Treasurer Phil Angelides is not one of those muffled, mealy-mouthed politicians. Read his lips: If he were governor, he'd raise taxes. He would crusade for higher taxes.

Unlike Gov. Gray Davis, Angelides says, he'd tour the state promoting a tax hike -- perhaps on corporations, on commercial property, on services -- not just to suture the bleeding budget, but to invest in California's future. Schools, highways, water. Universal health care.

Davis did propose a $8.3-billion tax increase in January -- on sales, high incomes and cigarettes. But anybody who blinked missed it. Rarely has the governor mentioned the idea since, never really trying to sell it.

Lately, Davis has been insisting it's actually Wall Street investment bankers who are pushing for a tax hike as a condition of loaning the state money. The bankers made me do it.

With a state budget gap of $35 billion-plus over two fiscal years, most people -- except Republican politicians -- are resigned to a tax increase. But the Democratic governor, other statewide officials and most legislative leaders are approaching the subject like it's a bed of hot coals.

Not the treasurer. And this separates Angelides, 49, from most of his Democratic colleagues as he prepares to run for governor in 2006.

The state not only urgently needs that $8.3-billion tax hike, he says, but another $2.5 billion to avoid education cutbacks.

"In the context of a $1.4-trillion [state] economy, we should not be penny-wise and pound foolish," Angelides asserts. "Education is the core mission of state government. We ought to be willing to raise the revenues to educate children so that we have a competitive work force for the global economy of the 21st century."

"That's courageous," observes Democratic consultant Darry Sragow. "Whether it's politically smart is unclear. Somebody might want to ask Walter Mondale about that."

In 1984, Democrat Mondale proclaimed he'd raise taxes if elected president. He then was trounced at the polls by President Ronald Reagan -- tax candor being only one of the reasons. A few years later, the first President Bush was vilified by conservatives, not so much because he raised taxes, but because he broke his "Read my lips" promise not to raise them.

Angelides believes voters can be sold a tax increase, but politicians are too scared to try. Lead and they will follow, he says.

"Look, here's what I would tell Californians: If we're going to compete in the global economy, we're going to have to do what any smart corporation does ... invest some of our collective wealth today in the future ....

"For too long, leaders in this state have been timid about talking to people about our challenges ... for fear of rejection.

"When the case is laid out to voters, they come to pretty reasonable judgments. I don't agree that people by nature are selfish.... People are being asked to do a lot of things without an overarching vision of where we're trying to go and why."

Is that a shot at Davis? "I'll just say this: The state can be much more active than it's been in the last few years in confronting our large challenges."

Successful tax and bond campaigns -- for schools, trauma centers, transportation -- show that Angelides is correct: Voters can be sold on digging deeper for causes they deem worthy.

A February poll by the Public Policy Institute of California found that 74% of those surveyed would be willing to pay higher taxes for programs they support.

Especially Democrats. Angelides is singing their song. And they'll be his first hurdle in the gubernatorial race, as he seeks the Democratic nomination, presumably against Atty. Gen. Bill Lockyer and possibly Lt. Gov. Cruz Bustamante.

"None of these guys is really well-known," says pollster Paul Maslin, an advisor to both Davis and Angelides. "Ideas, vision, philosophical underpinnings may be a premium.... Candidates' backgrounds and positions shape primaries."

Angelides' background as a housing developer earns him business credentials to wave at moderate Republicans during a general election.

"At the same time that California asks businesses to pay for essential public goods, it has got to stop being so arrogant about the way it deals with people creating wealth for this state ... stop assuming companies will be here no matter what."

Still, the California native adds, "we are not going to be the cheapest place on earth to produce goods. We are not going to be competitive in a race to the bottom. The only chance we have to succeed is to be the best ... to have the highest quality of life."

This means the best education system, he repeats -- over and over -- and an infrastructure "that can support private sector economic expansion."

"I've decided, given the chance," Angelides says, "I'm going to swing the bat big."

Swing big, rather than crouch meekly like so many politicians, bat on shoulder, hoping for a free pass.

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