Saturday, October 30, 2010

Jerry Brown; A History of Failure to Act

When Jerry Brown was voted in as Governor, he inherited a $555,000,000 surplus from Governor Reagan at the end of Fiscal Year 1974-75. Brown allowed the surplus to balloon over three fiscal years until it reached $5,300,000,000 or a 954% increase. One of the main causes of the budget surplus was inflation and a housing bubble. The effect of inflation on property taxes also resulted in considerable hardship on home owners in the state at the time, but Brown refused to address the issue. This led to the Jarvis initiative and the passing Proposition 13 in 1978. At the same time, Brown pushed through another measure that was supposed to hold off, proposition 13 that called for the indexing of state income taxes for inflation; this saved California tax payers about $231 million, or $400 million over two years. Once Proposition 13 passed, Brown became a self-avowed, newborn tax cutter. However Brown did not see the necessity of maintaining the indexing, but he was overruled with Proposition 7, that made it permanent. Proposition 13 also placed the state in control of education. This directed a greater percentage of local property tax revenue to education and required more money from the state general fund to cover mandated expenses. As a result, Brown drained the state surplus and added 2 cents to the state gasoline tax. Many have tried to mitigate the gas tax increase as small, due to its price per gallon, but the result was well over $200 million a year.

While Jerry Brown been credited or demonized for raiding the state’s surplus, raising taxes and increasing spending when he was governor, this was all in reaction to Proposition 13 and the Carter recession that combined to drastically reduce tax revenues in California. But where does that leave Jerry Brown? If he has one major problem it is his hesitancy to act. During his first 4 years he spent way too much time posturing his austerity without taking the time to scope out the needs of the California voter. During this time, with a growing multi-billion dollar surplus he nothing at all with the money, no infrastructure building, no tax cuts, nothing. Afterwords, without being a newborn tax cutter, Brown could not have won the election. Jerry Brown is a political animal that has flown from the seat of his pants his entire career. If his political ads are a judge, I have little faith he has changed. When Jerry Brown was voted in as Governor, he inherited a $555,000,000 surplus from Governor Reagan at the end of Fiscal Year 1974-75. Brown allowed the surplus to balloon over three fiscal years until it reached $5,300,000,000 or a 954% increase. One of the main causes of the budget surplus was inflation and a housing bubble. Property taxes was one of the main causes of this runaway surplus that resulted in considerable hardship on home owners in the state at the time, but Brown refused to address the issue. This led to passing Proposition 13 in 1978. At the same time, Brown pushed through another measure that was supposed to hold off, proposition 13 that called for the indexing of state income taxes for inflation; this saved California tax payers about $231 million, or $400 million over two years. Once Proposition 13 passed, Brown became a self-avowed, newborn tax cutter. However Brown did not see the necessity of maintaining the indexing, but he was overruled with Proposition 7, that made it permanent. Proposition 13 also placed the state in control of education. This directed a greater percentage of local property tax revenue to education and required more money from the state general fund to cover mandated expenses. As a result, Brown drained the state surplus and added 2 cents to the state gasoline tax. Many have tried to mitigate the gas tax increase as small, due to its price per gallon, but the result was well over $200 million a year.

While Jerry Brown been credited or demonized for raiding the state’s surplus, raising taxes and increasing spending when he was governor, this was all in reaction to Proposition 13 and the Carter recession that combined to drastically reduce tax revenues in California. But where does that leave Jerry Brown? If he has one major problem it is his hesitancy to act. During his first 4 years he spent way too much time posturing his austerity without taking the time to scope out the needs of the California voter. Afterwords, without being a newborn tax cutter, Brown could not have won the election. Jerry Brown is a political animal that has flown from the seat of his pants his entire career. If his political ads are a judge, I have little faith he has changed. Brown says there should be no tax increases without a vote, sounds good, especially due to the fact that tax increase in California require a 2/3 popular vote. Lets hope his other ideas will be more robust than that.

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