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Tax Plan Budget Fix a Fairy Tale

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Tax Plan Budget Fix Fairy Tale

The way Gov. Brown tells it, the story of the state's three competing tax plans resembles the tale of Goldilocks and the Three Bears.

Brown's argument: that the competing measures -- a permanent income tax hike on millionaires sponsored by unions and progressives, and a 12-year- temporary income hike on everyone sponsored by a wealthy civil rights attorney -- don't fit Calfornia. They won't help fix the budget.

No surprise that in his story line the only one that is just is the one Brown himself has proposed.

When it comes to the two competing measures, Brown is basically right.

Both measures, for the most part, put the money they raise in new budget boxes where they can't be directly swallowed up by the convoluted existing budget system.

In that way, they don't much help close the budget deficit or square the state's books.

The trouble for Brown is that his own criticism exposes the problems and limits of his own initiative--and indeed his entire approach to the budget.

His initiative, because it is based on small, temporary, tax increases, doesn't do much for the budget deficit long-term.

In the short term, its chief virtue is that fits with his existing budget plans, which include a "realignment" of some government services from the state to the locals.

In effect, Brown's argument is that his tax proposal fits his budget, and the others don't.

This is a very circular argument. It's not a convincing argument, because Brown's budget strategy is an unconvincing one.

Essentially, Brown's approach has been to make cuts -- including destructive cuts to higher education, which is the state's competitive engine -- and then use billions in overly optimistic revenue assumptions to suggest he's making budget progress.

Part of the game plan also is to call for voter-approved tax hikes while blaming others for not supporting him (Republicans who wouldn't vote for taxes, or Democrats who want different taxes).

What Brown doesn't do, in his initiative or his governance is fix the budget system itself, and it's the system that keeps driving up spending mandates while ratcheting down revenue.

Indeed, Brown, in going after the competing measures, is effectively a defender of the system.

The governor told the San Francisco Chronicle that the competing measures failed to consider Prop 98 -- the voter-approved formula for calculating K-14 education spending.

Then in the very same interview, Brown accused the competing initiatives of engaging in "ballot-box budgeting."

Yes, Prop 98 is exactly what ballot-box budgeting is. So Brown is in one breath blames the competing intiiatives of doing the bad thing -- ballot box budgeting -- that breaks the budget, and then accuses the competing measures of not working working with the ballot-box budgeting regime that is central to the broken budget system.

It's enough to make your head explode.

It's also a reminder that none of these measures, whatever their advantages and disadvantages, do much of anything to fix the broken system that has made California ungovernable. 

And that's no fairy tale.

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