You’re going to be hearing a lot from my opponent in the coming weeks about my budget vote from last year. He’s trying to beat me by telling the voters that I voted for the “largest tax increase in the history of California” (which if taken in terms of our overall percentage of revenues is actually far from the truth…but I digress).
What can I say…sometimes when you’re in a leadership position, you have to make difficult votes and you can’t hide from the realities of the situation we were faced with at that time.
Soon after the vote on that budget took place last year, I wrote this op-ed for the Sacramento Bee and I offer it as an explanation of why I voted in favor of that budget.
Budget Represented the Most Prudent Option
By Assemblyman Roger Niello
California’s budget problems have been well documented. A tragically weakened economy combined with ongoing spending commitment means that we are now looking down the barrel of a record $42 billion budget deficit. I supported this budget agreement because for me, it was never a choice between spending cuts and taxes. My overriding interest has always been to reform the way we do things, and with this budget, I believe that was accomplished.
Throughout last year’s budget debate I was opposed to raising taxes. At the same time, and for years prior, the majority party ignored prudent reform proposals that could have taken California down a different path. Unfortunately, it took a budget deficit of the current magnitude for the majority to finally be willing to discuss these reforms.
After realizing the size and scope of the problem, it became evident that both spending cuts and taxes would ultimately be a necessity. It remained my goal to work, through negotiations, for major reforms; fundamental changes that will keep our state from this disastrous scenario again. It was also important to lessen the blow of any tax increases on the economy as much as possible by getting support for legislation that will help our economy recover as quickly as possible.
And let’s be clear; the changes that Senate and Assembly Republican leadership were able to negotiate in this agreement are significant. In December of 2008, Republicans put forth a budget proposal that included a variety of reforms that we thought were necessary to solving the problem and initiating economic recovery. Now, as a result of negotiation, all of those reforms have either been enacted or will be placed before the voters as a result of this budget agreement. This is a huge victory for the taxpayers of California.
The reforms include ideas that I have fought for since being elected to the Assembly, including public private partnerships to rebuild our infrastructure, ending the maddening tax laws that encouraged out-of-state location of manufacturing plants, and returning to workers the ability to choose a flexible work week.
But for me, the anchor of these reforms is the spending cap, which is a measure I authored. This proposal will limit the size of government, ensure that we never again face a budget crisis of this magnitude, and set aside money in a rainy day fund during the good times to ensure that we can weather the bad.
In negotiation, there are gives and there are takes. In order for Democrats to support or even consider reforms of this magnitude it was necessary for Republicans to agree to temporary tax increases. This was painful, and therefore it became a priority of mine to minimize the economic impact of the taxes; making sure that they are temporary, and linking them to the spending cap to ensure that the taxpayer is at the front of the line in the event that the spending cap fails and the state cannot keep spending in check. With this budget agreement, I believe these priorities were met.
Finally, the consequences of not agreeing to a budget now were too severe and simply not an option. As California continued to face a severe cash shortage, having more bills to pay than money to pay them, the bus that is California’s state government would have continued to go over the cliff and had a resulting negative impact on everyone.
The most disastrous scenario would require IOU’s to be issued for payroll and tax refunds, small counties would go bankrupt, resulting in the complete stoppage of many county services. There would likely be health clinic and hospital closures statewide. Unemployment would skyrocket. At some point, the state’s ability to issue bonds would completely stop and road construction and public works projects would grind to a halt.
In other words – most taxpayers would have been heavily impacted.
The unfortunate circumstance we find ourselves in is one in which the taxpayer would have paid one way or the other. Either now, in the form of temporary new taxes that are combined with significant reforms to keep us from this disaster again, or later, when the state’s economy is devastated because the state can no longer pay its bills.
When I was elected to the Legislature, I could not have imagined that our fiscal condition would ever be this bad, but the reality is that the perfect storm has come together and produced a budget deficit of historical proportions. I voted for this budget because I felt it represents the most prudent option to right our fiscal ship. I am confident that this package will help our state’s economy recover quickly while inflicting as little damage as possible and placing us in a better position longer term.