Assembly Republican Caucus

The Issue: The California legislative Republicans released their budget proposal Monday.  The proposal includes no tax increases while asking voters to spend pools of money set aside for certain social services and cuts spending.  The proposal should be a strong indicator to the Democratic leadership that the GOP has no interest in compromising.

The Republicans have made their philosophy regarding the budget very clear:  nothing short of a drastic overhaul of the state’s spending program will prevent further budget problems in California.  The Democratic party is quick to call this budget ideology and posturing, but beyond the knee-jerk reaction most liberals will have to spending cuts, most have to admit that the Republicans have the right idea regarding long term fixes for our budget.

Tax increases are not the correct path to go.  By increasing the income and sales tax burden on HENRYs (High Earner Not Rich Yet) you prevent their ability to maintain their status as middle class.  The long term result will be a larger group in need of the already large social safety net.  By maintaining the tax rate (as the Republicans propose) you allow those planning for the future to accurately predict their income levels.

Spending cuts are the only realistic way to close the budget gap in the short term.  The long term presents another problem.  Basic spending controls need to be put in place to ensure the state is both reasonable and predictable with it’s funding levels.  Spending Caps and Rainy Day Funds are two solutions that work to achieve predictability.  Also, the notion of a two-year budget cycle will give the Legislature more time to work on matters other than the budget, which seems to have taken the lion’s share of the capitol’s attention this season.  Even if it takes the parties an entire year to write a biennial budget, they will get a year off to work on other matters.

The main reason people cannot swallow the necessity of the GOP budget proposal is because they are invested in a specific program that is affected by the cuts proposed.  If one looks beyond their biases to the harsh reality of the budget crisis before us, they should understand the inevitability of such action.  The big picture is that the State is falling apart from too many years of overspending, and that spending needs to be put back in line immediately in order to preserve the California way of life.

The Chancellor Charles Reed from the California State University has been a great leader in this effort.  Rather than risk insolvency, he opted to reduce freshman enrollment by 10,000 students, bringing his system back in line with the target growth setup by the Governor’s CSU Compact.  Rather than risk the quality of education for all CSU students, he is being realistic about his abilities and giving the students enrolled the education they pay for.  It was over-enrollment that got the CSU in trouble in the first place, and fixing enrollment is the solution.

Extrapolate that notion to the state of California:  The Legislature has been overspending (over-enrolled) for a decade and now must fix the spending problem (the enrollment problem) before it’s too late.

Conclusion:

The Republicans are likely to stand strong against any tax increases and unlikely to compromise their values.  Too much is at stake.