Sometimes during fiscal crises, red flags fly that should make us watch our politicians like hawks, but we citizens often fail to do so. The price we pay can be huge. That is why I direct your attention to the glowing red flag that is Assembly Speaker Herb Wesson.
Wesson, a likable Democrat from Culver City, was the mastermind of the much-debated vehicle license fee that was reduced 67 percent when the state economy was flush in 1999, but would have skyrocketed right back up if the state Legislature had convinced Gov. Gray Davis to sign the awful document.
Much to his credit, under the influence of his new finance czar and former San Diego legislator Steve Peace, Governor Perfect Hair stuck his neck out this week. He called it a bad bill freighted with legal troubles and partisan slaps at Republicans whose votes are needed to approve far more pressing budget cuts and tax restructuring.
As Peace noted in a phone discussion with journalists, the nasty and inept Wesson bill would not only quickly turn off Wall Street lenders who are about to give California its new credit rating, but it also "compromises the bipartisan atmosphere we are trying to husband to get to a final budget resolution."
For once, I was impressed.
Though the media continually minimized the proposed tax as a mere $115 extra annually, if you live in a typical two-car California household and one or both of your cars are newish, your family would have gotten stuck for $350 to $600 in extra taxes every year at registration. That's serious pain, even worse because working-class households will be paying $150 to $300 in extra tax on retail goods like clothes if Davis and the legislature find a way to add a penny to the roughly 8-cent sales tax, which they probably will.
I mention this because, with very little discussion about us taxpayers, Wesson and the Assembly decided that it was perfectly OK with you and me that what is right now by far the highest car tax in the United States go waaay back up to recession-era levels.
While the media have heavily reported on the car tax, an equally disturbing story is the incredible bubble inside which Wesson and the Assembly leadership made the decision, rubber-stamped by the Senate few days later.
In January, Oregon citizens gave us a preview of what I believe will happen as Californians strike back at a disconnected Legislature and governor far too eager to tax people out of their savings accounts. In Oregon, the legislature faced $310 million in budget cuts-big for that small state-because politicians also overspent in 2001 and 2002 while hoping vanishing income-tax revenues would pour back in from a revived stock market. California's politicians, as you may know, are the worst example of this thinking, having driven this state more than $26 billion into the hole.
Political strategists trying to gauge Californians' willingness to pay higher taxes to avoid cuts in services were closely watching Oregon's Measure 28 on Jan. 28 as a bellwether. In Oregon, the media predicted that if deep budget cuts were made, children's programs would disappear, the elderly and poor would lose medical care, and large numbers of highway patrol would be laid off. And, just like here, the Oregon media ran very few stories about how to instead cut the state bureaucracy. The pro-tax forces from the unions, business groups and special interests outspent the anti-tax forces by 100 to 1.
On Jan. 28, big-hearted voters in Oregon, who mirror California in their liberalism, turned out in record numbers to repudiate the tax increase by a vote of 54 percent to 46 percent. The message was clear and hard as Lucite: politicians must stop spending beyond Oregon's means now.
When I talked to Herb Wesson about Oregon, shortly before the Davis veto, he was riding high on the view that his new car tax would soon become law. Many of California's Democratic strategists had assumed Oregon would heartily approve their new tax, and that they could ride Oregon's coattails in California.
I was stunned by the following bizarre yet illuminating conversation:
Me: "The voters in Oregon made a strong statement against tax increases this week, and I wonder how surprised you were and whether it changes your view that raising the car tax is a good initial message in this budget crisis?"
Wesson: "The Oregon vote is in? You mean they voted on the tax already? You mean the vote on the measure to raise taxes for services up there ... isn't that vote set for next week?"
Me: "No, it was Tuesday. Oregon voters strongly rejected the tax. You weren't aware of that?"
Wesson: "Well I was going to find out about it. I certainly hope it doesn't reflect on California."
Incredible, just incredible, that the leader of the Assembly has so little clue what real people actually think, and doesn't even bother to stay apprised. Nor did Wesson have any real grasp of the tax he had just bullied through, whom it would have effected, or how.
I asked Wesson how much money he expected to reap off those who own used cars versus those who own new cars, and how much money would be paid by the middle-class and working class versus the wealthy, and so on.
Wesson said: "We only cared about the net $4 billion we would get." (His actual words). Further, he said, "I have yet to ask and have yet to receive any breakdown for how much will come from used cars or how much will come from new cars or how much comes from this group of taxpayers or that group or the other group."
This, again, is incredible. The Legislature damn well better care who the hell is paying to help them avoid seriously trimming their massive, 37 percent increase in spending since 1999.
So I asked Wesson if he thought there might be an effect on the middle class with the car tax bite. He responded with so much doubletalk that I thought he was goofing around.
Said Wesson, "The middle-class effect will be a benefit, in the sense that they buy vehicles for their children, so really a lot of what they are paying the tax for are these second cars."
Just try to make sense of that. It practically makes you want to run screaming for the Oregon border.
Embedded in the new car tax law was the sneaky provision that the tax could not be reduced again until the state was no longer borrowing money-a condition the state has not enjoyed in decades, regardless of how fantastic the California economy does. The truth is, Wesson and the Assembly were trying to assure that Californians would pay the newly tripled tax from now until forever.
Jon Coupal, president of the Howard Jarvis Taxpayers Association, praised Davis' decision, which was based in part on the fact that these slimy maneuverings wouldn't pass even basic legal muster.
But what rankles is me is Wesson's "tough beans" attitude that it's perfectly OK to screw the public and shirk the normal legislative checks and balances for approving taxes. What Wesson and the Assembly tried to do, Coupal notes, "was slam down our throats without a two-thirds vote the worst sham of a tax increase and it is the biggest joke in the world."
Wesson managed to trick the Associated Press, which on Feb. 3 reported that the Assembly approved an exemption for car owners who buy cars for less than $5,000 in order to help the low-income. Wrong! As everyone who is not catatonic in the capitol knows, the exemption was included so the Assembly could sneakily escape the required two-thirds vote for raising taxes in California.
Getting the two-thirds vote would have failed because Republicans vociferously oppose the tax. By exempting cars purchased for less than $5,000, which constitutes a special tax decrease for those owners, the legislative counsel contended the Assembly needs only a simple majority vote. On top of that, in order to forestall a voter revolt over these shenanigans, the Democrats declared the tax a "levy" that takes effect immediately and cannot be overturned by taxpayer referendum.
We'd do well not to trust too heavily in Herb Wesson. He has already cost the state more than $500 million, for he alone torpedoed a 50-cent-per-pack cigarette tax proposed by Davis last fall, chucking it in favor of an utterly un-passable $2-per-pack tax that neither side of the aisle saw as fair to smokers.
It's not that Wesson, so eager to tax us but understanding so little about us, is dumb. It's that he survived largely on public largesse for years as an aide to Los Angeles County Supervisor Yvonne Brathwaite Burke.
Now Gray Davis and Steve Peace are powerfully suggesting that Wesson shake off his comfy cocoon and the Assembly and Senate stop playing games and start coping with deep budget cuts. If I didn't know better than to hope for such impossible things, I'd say somebody in Sacramento has finally started hearing us, the long-ignored public.