Pubdate: Sun, 21 Mar 2010
Source: Orange County Register, The (CA)
Copyright: 2010 The Orange County Register
Contact:  http://www.ocregister.com/
Details: http://www.mapinc.org/media/321
Authors: Alan W. Bock, Brian Calle and Mark Landsbaum, Register columnists
Bookmark: http://www.mapinc.org/opinion.htm (Opinion)

GETTING CALIFORNIA'S HOUSE IN ORDER

As campaigns begin in earnest for the June primary and November 
election, the editorial writers offer nine ways to put California on 
a sound financial footing, yet at the same time protect and enhance 
individual liberty. We'll be sizing up the candidates for their approaches.

Spending Limit

The state Legislature operates on the apparent notion that it should 
spend as much money as politicians want to spend, or at least as much 
as their constituents desire to have spent on them. That is a 
bankrupting philosophy, rooted in the idea that government is the 
granter of wishes, instead of the protector of rights.

Ideally, government would never spend a dime on anything except those 
things that protect the peoples' God-given rights from those who 
would abuse them. Alas, we don't live in an ideal world.

That's why it's necessary, at the very least, to impose restrictions 
on government spending. Otherwise, the foxes are in the chicken coop. 
In the 1980s, California enjoyed such a cap on spending, provided by 
the Gann initiative, a constitutional amendment approved by voters in 
1979. Unfortunately, some chaffed at the idea spending should be 
limited. Transportation interests promising to end freeway congestion 
buried in a subsequent ballot measure a reconfiguration of how the 
limit was calculated, essentially rendering the limitation toothless.

It's past time to revisit the idea of capping government spending. A 
new, bullet-proof Gann-type limitation based on inflation and 
population growth might do the trick.

Change Government Pensions

One of the consequences of an ever-expanding state government is that 
the ever-greater workforce to sustain it is always growing in 
influence over it. In a nutshell, that explains how government 
employees enjoy retirement benefits that in many cases put to shame 
nearly all private-sector systems.

As public employees' numbers increase, their political clout has, 
too. Consequently, state legislators elected by this powerful lobby 
return the favor by lavishing benefits on the government workforce. 
These benefits are legally locked in as contractual rights, and most 
likely cannot be undone or even scaled down, even in the event of 
looming fiscal insolvency.

So, the state is sitting on a ticking time bomb of unfunded benefits 
due tens of thousands of government employees once they retire. To 
perpetuate this system is fiscal suicide. We recognize the legal and 
moral constraints that prohibit Californians from reneging on 
agreed-to terms for existing and retired government workers.

But there's nothing written in stone that every newly hired 
government worker should receive similarly plush benefits. To disarm 
the time bomb, California should switch to a defined-contribution 
system of retirement benefits for new hires, similar to 401(k)s in 
the private sector. Guaranteeing a fixed level of retirement 
benefits, as is the case for current employees, ultimately will only 
be an explosive disaster.

End Preferential Tax Treatment

When you see an advertisement promising "20 percent off" at a local 
store, does it cross your mind that the merchant may have marked the 
item up 20 percent before he marked it down? That's something like 
what politicians do to trick taxpayers with "tax credits" and other 
selective tax reductions.

Ask yourself: "If they want to give me some of my tax money back, 
why'd they take it in the first place?" The answer is, so they can 
use your own money to bribe you. Nevertheless, gullible taxpayers see 
tax credits and the like as government being gracious, even generous.

These preferential tax treatments only tighten government's grip on 
private pocketbooks. Selectively "rewarding" certain taxpayers, 
usually for certain government-approved behavior, is nothing more 
than bribing them with their own money.

Buy a "green," car and get some of your taxes back. You want an 
ungreen car? Sorry, no tax credit. Operate a business the government 
prefers, like selling windmill blades, and get a tax credit. Operate 
a gasoline station? Sorry.

Taxpayers not favored with such treatment should be hopping mad.

Here's the solution. If government intends to return tax money to 
taxpayers, don't take it in the first place. Add up the value of all 
tax write-offs and credits, then reduce taxes by that much.

Align State, Federal Labor Laws

California labor laws need to be updated, which should be one of the 
first priorities for state lawmakers. If businesses are increasingly 
taxed out of the state, the job market will look bleaker and the 
state jobless rate, already at 12.5 percent, will increase. A 
commonsense reform would be to bring California labor standards in 
line with federal standards. That would make California more 
competitive with other states and give businesses the breathing room 
they need to hire more people. For example, state overtime 
requirements require companies to pay overtime to workers who work 
over eight hours a day while the federal standards require overtime 
to be paid to workers who work 40 hours a week. The federal rule 
gives companies the flexibility of allowing workers to work 10 hours 
a day for four days a week without paying overtime, a tactic needed 
in globally competitive career fields like technology. California 
likes jobs but its current labor laws punish employers.

Repeal AB32, Global Warming Solutions Act

Out-of-control state government has spread to places government has 
no business going, funded with money government has no business 
taking and has led to a government by administration, in place of 
government by representation.

The epitome of the administrative state is the hubris that gave 
California the 2006 Global Warming Solutions Act, a monstrosity of 
government regulation and taxation that literally seeks to regulate 
the very stuff people exhale: carbon dioxide.

Operating on the arrogant assumption that they can change the global 
climate, which has had no trouble changing itself for countless 
years, state bureaucrats are using this nearly boundless legislation 
to justify writing countless rules for everything from what kinds of 
products can be sold to what kinds of businesses can operate.

The enabling legislation, Assembly Bill 32, is the forerunner of 
touted federal cap-and-trade legislation, the implications of which 
so far have scared members of Congress enough that they are afraid to 
implement a national version.

But where Congress fears to tread Gov. Arnold Schwarzenegger, the 
Legislature the state Air Resources Board plunge ahead full-speed. 
Repeal of this utterly intrusive, economy-retarding administrative 
power grab is necessary to reverse decades of creeping regulatory 
control over more and more of Californians' lives. Otherwise, we're 
in for much more of the same.

Fix Education

Meg Whitman says one of her three goals if elected governor is to fix 
California's schools but, beyond making it easier to form charter 
schools, she offers few specifics. A real fix would recognize that 
any effective monopoly inevitably leads to lower quality and higher 
costs (recognizing that even now some schools and many teachers are 
quite good) and seek to induce more competition.

Making it easier to form more government-funded charter schools 
(though recent research suggests they're no panacea), merit pay for 
teachers (though some subjective judgment will always be involved), 
and transfers at will would provide marginal improvement within the 
context of the current system. But the current system deserves a more 
thorough shaking-up. We need to think first of the needs of the 
individual student, recognizing that they have different aptitudes 
and enthusiasms and progress at different speeds.

The most obvious reform would be a voucher system, where parents 
would have control of the money appropriated for each student, and 
not just for a handful of poor and minority students but for 
everyone. This would encourage more intense parental involvement and 
intelligent "shopping" among government and private schools. 
Philanthropists should also be empowered to contribute to a voucher 
fund to increase the range of choices. The competition would tend to 
improve quality over time.

Separation of school and state, the preferred solution, may not be 
politically feasible anytime soon. But consider: An institution 
funded by the state is hardly in a position to encourage independent 
inquiry into whether taxpayer subsidization is the best way to 
provide goods and services in any area, but such independent thought 
is vital to the health of any polity.

Privatize Prisons

Although some philosophical questions arise about whether it is 
appropriate for the state to subcontract its power to punish people 
for crimes and violations of laws, at a practical level more 
privatization of prisons is virtually a no-brainer. With some 
exceptions, private prisons are run less expensively and more 
humanely than government prisons, and with more experience we should 
learn from mistakes and fashion contracts more carefully to make sure 
quality is enhanced. Privatizing prisons would also break the 
political strength of the prison guards union, which has generally 
lobbied for criminalizing more acts, longer sentences, and higher pay 
and more job security for guards.

Prison reform, however, should be accompanied by sentencing and 
probation reform. Attitudes toward crime tend to swing back and 
forth, pendulum-like, and since the 1980s we have been in a "tough on 
crime" phase that has increased prison populations inordinately. 
California's Three Strikes law, the harshest in the nation, is in 
need of modification. More fundamentally, it's time to reconsider 
whether some acts should really be treated as criminal (see below) 
and whether longer sentences are always the answer.

Drill, Baby, Drill

Complete energy independence - no more reliance on foreign suppliers 
- - is probably a pipe dream and might not be as desirable as some 
people think anyway. But for the U.S., and particularly for 
California, with its budget crisis and high unemployment, to keep 
certain energy supplies off-limits to any utilization is simply unconscionable.

California has large reserves of petroleum in offshore fields, and 
extraction methods have been improving steadily. Opposition to 
exploiting them is almost entirely emotional and esthetic people 
remember the 1969 Santa Barbara oil spill and the 1989 Alaska 
oil-tanker spill and think a few drilling platforms just over the 
horizon will spoil the sacred beach experience. It's time to extract 
as much homegrown oil as is possible within firm environmental guidelines.

More alternative sources of energy should hardly be discouraged. The 
temptation to subsidize wind power, solar power - or nuclear power - 
even with the promise that it's just a temporary program to give them 
a foothold, however, should be resisted.

Subsidies must come from tax dollars, which means narrowing choices 
in other areas for consumers, and in the long run they are not 
economically sustainable. So take a look at various regulations that 
hinder the development of nuclear and other forms of energy and clear 
away those that are not absolutely essential. Let the market 
consumers decide which forms of energy production (it might be 
radically decentralized power stations) will predominate.

Tax Marijuana

One of the most sensible ways to mitigate the government's budget 
crunch is unlikely to come through the legislative process, though a 
bill has been introduced and passed by one committee. But California 
voters will have a chance to get ahead of their leaders in November 
by approving an initiative to tax, regulate and legalize marijuana 
use for adults. Doing so would also help our neighbor Mexico, given 
that some 60 percent of the revenue of the Mexican cartels involved 
in the current tragically deadly drug war are said to come from 
marijuana. Legalizing marijuana in California would dry up a 
significant part of that illicit revenue.

Although marijuana is not without its potential dangers, scientific 
studies validate that it is less organically dangerous to human 
beings - as in no documented overdose deaths over thousands of years 
of use than the legal drugs alcohol and nicotine. In the form of 
hemp, it is also valuable for food, fiber and fuel. Legalizing it 
would invigorate California's agricultural sector.

The benefit to California's budget would be twofold. Police focusing 
on the hopeless task of eradicating marijuana could focus on real 
crimes, and enforcement costs would decline. Fewer lives would be 
ruined by people being arrested for marijuana use, and the jail and 
prison population would decline. And if marijuana were taxed it would 
bring in considerable revenue. The state Board of Equalization 
estimates that a $50-per-ounce excise tax would bring in $1.4 billion 
to the state, and decreased costs of investigation, prosecution and 
incarceration would be at least several billion. That wouldn't close 
the budget deficit but it wouldn't hurt. 
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MAP posted-by: Richard Lake