California Democrats Just Don’t Get It

As the economy and state budget crisis worsen, all they can talk about is raising taxes. But going after public employee unions? Not on your life.

History has shown us repeatedly that it’s a cardinal sin to raise
taxes on lower- and middle-income people during a recession or
depression. The reason is simple — you want working-class folks
to have as much disposable income as possible so they’ll spend it and
help bring the economy out of the doldrums. Raising taxes, on the other
hand, forces people to spend less, thereby worsening the economic
crisis. It’s a vicious, negative feedback loop.

So at this point, you might be thinking, “Who stole my
Express and turned it into a right-wing rag?” Actually, raising
taxes in a recession is not a liberal or conservative issue. It’s Econ
101. No one, for example, in the Obama administration or the
Democratic-controlled Congress is talking seriously about increasing
taxes right now. In fact, the president just approved a major tax cut
for lower- and middle-income families as part of the national stimulus
package. So why, then, are so many Democrats in California and the East
Bay hell bent on doing the opposite? Why do DC Dems and the Obama
administration get it and they don’t?

The simple answer is that state and local politicians appear to be
less afraid of the electorate than they are of powerful public employee
unions. That’s why instead of seeking pay cuts and concessions from
well-paid bureaucrats, Democrats up and down the state are proposing a
host of new taxes to deal with looming budget crises. The state’s
projected deficit is expected to reach $6 billion to $8 billion
beginning July 1.

The bad ideas include raising taxes on alcohol and gasoline, and
increasing vehicle license fees. It’s not that these proposals have no
merit; they’re just counterproductive in a steep recession. In fact,
we’re all for using the tax code to change undesirable behavior. It
makes for good public policy — in a decent economy. Another gas
tax or higher vehicle license fees, for example, will help discourage
driving — a step in the right direction to limit greenhouse gas
emissions.

But you don’t rob people of their disposable income when the economy
is starving to death. Plus, these types of taxes are inherently
regressive because they end up hurting lower- and middle-income folks
the most. The only tax that lawmakers should be discussing seriously is
a state income tax increase on the wealthy. Taxing them is the most
efficient way to raise significant sums while inflicting the least
amount of damage on the economy.

Unfortunately, local Dems seem to be just as clueless. Last week, an
Oakland City Council committee revived an $8 million annual parcel tax
proposal to pay for park maintenance and tree trimming. What’s not on
the council’s agenda? A plan to ask well-paid city workers to give pay
concessions. The same with our local bus agency. Last week, the AC
Transit board of directors voted to break its promise to customers and
taxpayers by voting to raise basic fares by 14 percent from $1.75 to
$2.00. Last fall, board members told riders and voters that a fare hike
would be unnecessary if they approved a $15 million annual parcel tax.
East Bay voters overwhelmingly approved the measure, but then when the
economy tanked, the board quickly did an about face. As for demanding
that highly paid management employees take a salary cut of their own,
you guessed it, not even on the radar.

A’s to Oakland: Buzz Off

If there was any question as to whether the A’s plan to stay in
Oakland over the long term, team co-owner Lew Wolff made his intentions
crystal clear last week. In a tersely worded statement, Wolff summarily
rejected Oakland’s latest attempt to stop the team from leaving,
saying: “We have fully exhausted our time and resources over the years
with the City of Oakland, dating back to previous A’s ownership. … We
have no interest in covering old ground again, as we need to move
forward in finding a future home for our team.” Wolff’s Dear John
letter came in response to a request sent by city leaders to Major
League Baseball, asking for help in keeping the A’s in Oakland, now
that the baseball team’s plans for a Fremont ballpark are dead.

More Signs of the Apocalypse

Journalism took another body blow over the weekend when reporters,
photographers, and editors at the San Francisco Chronicle voted
to allow the company to lay off 150 people — mostly from the
newsroom. The union rank-and-file did what it had to. If they had
rejected the deal union leaders made last week with company
negotiators, the result would have been worse — 225 layoffs.
Nonetheless, it’ll be sad to watch so many journalists get the axe. A
lot of good people will be out of jobs soon, and that’s not a positive
sign for watchdog journalism. Fewer reporters mean fewer stories will
be uncovered. The decline of journalism, in short, will surely give
rise to more corruption and ethical lapses in government and business.
Wrongdoing thrives in the shadows.

Three-Dot Roundup

Finally, some good news in Oakland: Crime is on the decline, at
least for the first two months of 2009. Homicides were down a whopping
50 percent. … In Berkeley, however, students are taking it in the
shorts again — another 10 percent fee hike for undergrads at the
University of California starting this summer. It looks like an
affordable public college education is close to becoming just a distant
memory. … Ah, well. We’re all going to be screwed anyway. A new
report shows that sea levels are expected to rise much more rapidly
than previously thought — up to five feet this century because of
global warming. As a result, most California coastal communities, and
much of the inner San Francisco Bay, will be under water. Giant
seawalls, anyone?

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