Wednesday, April 20, 2011

Another Sign California Does Not Need Tax Extensions

Today finds Jerry Brown and California Democrats in quite the bind. They've been filling the public with warnings of the doom that will surely engulf them if they don't pass a five-year extension of income, sales, and other taxes to balance California's budget. And they haven't made much headway: voters hate the idea of new taxes, new projections suggest that cuts already agreed to may not save nearly as much as anticipated, and the news keeps bringing story after story of corruption and special interest giveaways out of Sacramento. Yesterday, they got even more bad news, with the revelation that the state has dumped millions of dollars in extra tax-free salary and travel expenses into the laps of public employees.

Umm, yeah. About those five years of higher taxes . . .

If we're being generous, the state technically just made some bad loans. Okay, a lot of bad loans. Apparently, state employees were loaned advances on travel and salary, and the agencies in question never bothered to collect repayments. In response, Gov. Brown has ordered a full audit to determine the scale of the problem. To us, this isn't very comforting. According to the LA Times, a similar audit in 2009 found that $13.3 million in loans to employees had not been repaid; if that audit resulted in no meaningful action, why should this one?

Just something else to keep in mind every time Sacramento tells you it has a revenue problem rather than a spending problem.


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