The governor also wants to expand the sales tax to include some services, such as vehicle repairs and veterinarian care, and would hit oil companies with a 9.9% tax for extracting black gold in California.
Schwarzenegger is simultaneously seeking $4.5 billion in immediate spending cuts, with more than half of that amount coming from public schools (which the governor's kids don't attend).
And just when many Californians are thinking, "Man, I could use a stiff drink," Schwarzenegger wants to raise alcohol excise taxes by 5 cents a drink.
These are short-term measures. But California's budget problems aren't short-term. The governor and his legislative cohorts also need to be thinking about long-term solutions to the state's chronic budget mess.
"California should have looked at reforming its tax system years ago," said Terri Sexton, an economics professor at Cal State Sacramento. "Unfortunately, this only becomes obvious when we need more revenue."
I'll fasten my seat belt and say once again that it's time we revisited Proposition 13. No, I'm not proposing that everyone's residential property taxes go through the roof. Yes, it's probably a good idea for commercial property taxes to reflect market values.
A 2003 study by the UC Davis Center for State and Local Taxation found that at least $3.3 billion could be raised if commercial properties were taxed at a rate of 1% of market value, rather than being based on 1975 values as per Proposition 13.
Meanwhile, it's silly for California to be one of just three states -- the economic powerhouses of Arkansas and Rhode Island being the others -- requiring a two-thirds legislative majority for budget matters. While this requirement might be well-intended, keeping Republican lawmakers in the game, it means the budgetary process is held hostage annually to special interests and ideological grandstanding.
California should join nearly all other states in requiring a simple majority for budget approvals. This could be done either by a ballot initiative or by holding a constitutional convention (although that too would require the support of two-thirds of lawmakers).
It's not Schwarzenegger's fault that a tanking national economy has blown a hole in the state's finances. But it's taken him far too long to accept that California has financial obligations that are plentiful and pricey, and that spending cuts will get you only so far toward balancing the budget.
"We have a dramatic situation here and it will take dramatic solutions to solve it," the governor told reporters last week.
Welcome to the real world, bub. And if being a girlie man means that you stop living in fiscal fantasy land, then let's hand tutus to everyone in the Capitol. It would certainly make the budget process more entertaining.
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David Lazarus' column runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.
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