Overview

The consequences of California’s most recent budget crisis are grim: 3 million Californians have less access to health care, buses and trains run less often and cost more to ride, the 35,000 students that usually enroll in the California State universities in the spring quarter won’t have that option, and up to 100 state parks may close. These cuts will make it more difficult for the California economy to recover in the short-term, and will have negative long-term consequences on Californians’ health, education and well-being.
 
We don’t have a position on how big or small government should be. But we do believe our tax code should be fair, we should have a stronger rainy day fund and we should have more transparency in government spending.

Fair Tax Codes
Last April CALPIRG Education Fund released a report, “Tax Shell Game,” which highlighted that many of the largest corporations in our country hide profits made in the United States in offshore shell companies and sham headquarters in order to avoid paying billions in federal taxes. California’s state tax code similarly has too many loopholes and tax breaks that unfairly place a higher tax burden on some individuals and small businesses by letting others off the hook. We’re working to close loopholes and make tax codes more fair.
 
A Stronger Rainy Day Fund
During the dotcom bubble, government spending grew 28 percent over two years. That growth was problematic because it was ultimately unsustainable, and we didn’t have the foresight to save for the burst of the bubble that followed. During recessions, revenue drops just as the needs for services grow. A smart budget puts away reserves for leaner times, through a flexible spending cap that can evolve with the state’s changing needs.
 
Transparent, Accountable Spending
Gov. Schwarzenegger recently created an online, searchable website of government contracts. In an op-ed we recently we wrote for the Sacramento Bee with the Howard Jarvis Taxpayers Association (an unlikely match, we know) we called for adding additional contract information currently missing, and for public disclosure of tax expenditures for companies.
 
Along these lines CALPIRG is co-sponsoring a package of bills to make the budget more fair and transparent.  Together, four bills will ensure that legislators have up to date information about corporate tax breaks, any new tax breaks have clear goals associated with them and come up for review every year.  Additionally, who is getting the tax breaks and how much they get will be made public for the first time.