Brown’s Tax Plan Could Create Budget Problems

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Gov. Jerry Brown appears to be very close to making public his own ballot initiative to raises taxes. Early media reports on the plan raise questions about whether it would provide a balm for the budget, or make things worse.

In saying this, your blogger doesn't mean to pass judgment on the question of whether to raise income tax rates on Californians making $250,000 or more a year, or to raise sales taxes by a half-cent. There are strong arguments for and against such tax increases. Your blogger is personally sympathetic to the idea that the state needs to raise revenues somehow.

But that doesn't matter. Because the biggest red flags lie not in the tax part of the proposal but in the budget pieces of the initaitive. in the non-tax parts of the initiative. Specifically, the things Brown proposes to spend the new tax dollars on.

According to the Sacramento Bee's account and other follow-ups, the Brown initiative would create new budget rules to lock certain revenues in place. The Bee says some money would be expressly reserved for education -- with new rules to govern how the money is spent. Some of the revenues would go to local governments to fund realignment.

The addition of these budget rules is poisonous. California's budget system doesn't work because there are already way too many budget rules or formulas for state officials to manage. Adding more such rules makes political sense -- voters will want to know where the taxes they raise go -- but is terrible policy. In the long run, the rules make things worse.

And more budget rules are a high price to pay for tax revenues that themselves won't be permit. The Bee reports that Brown's increases are temporary and will expire after five years.

If these early reports are correct, Brown's initiative would represent a departure from his much-touted promises to deal honestly with the budget and push back against gimmicks and other methods of pushing problems into the future. This is an initiative that puts more money into a broken budget system for five years -- and may make the budget system worse in the process.

In its reporting the Sacramento B ee

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