By Pat Orr
For the Apple Valley Review
The first good news this week is that the Republicans in the state Legislature held firm and none of the new tax proposals passed before the deadline.
The next bit of good news is that the Legislature is done for this session. No more stupid laws this term.
Now the bad news: The California Teachers Association filed a state ballot initiative for consideration extending the “temporary income tax hikes” passed as a part of Prop. 30 the day after the legislature adjourned. The CTA is not happy with hundreds of millions in budget surplus, they want more.
If their ballot initiative is passed by gullible voters, that'll equate to $6 billion to $9 billion more.
The name on this new tax proposal is the “School Funding & Budget Stability Act.” What's hilarious about the proposal is that California ranks right about in the middle of the pack on spending per pupil, but the one thing that could cause student success rates to soar, education vouchers, is a forbidden subject.
It's clear by now that throwing more money at a failed system, particularly in inner cities, does not produce the desired results.
The other “ha ha declaration” in this proposal is that high income tax rates on wealthier Californians will stabilize the budget when that is exactly the opposite of what happens. Rich folks, I am told, derive substantial income from investments. When investments are good they pay more in taxes. Sounds easy, huh?
The problem is that 70 percent of California’s income tax revenue is from folks who make $200,000 or more per year. So to start with, you have a narrow tax base you are relying more and more on. Two things can happen: wealthier folks leave California (this happens with each new attack on incomes) or when the market crashes again, and you know it will, investment gains and resulting tax revenue will plummet like it has in the recent past.
So rather than stabilize the budget, focusing all your tax revenue hopes and dreams on a narrowing slice of taxpayers puts the budget at additional risk.
Do the Democrats and teacher unions understand this? No, not one little bit. Nor do they seem to care.
A simple way to get rid of the big chains
On Nov. 10, the Berkeley City Council will hold a special meeting to consider raising that city’s minimum wage to $19 an hour by 2020. The Council has also asked for a draft ordinance that would force all employers within the city to pay for paid sick leave more generous than the recently enacted state law.
For some years the Bay Area, with its nose firmly stuck in the air, has been on a mission to rid itself of these tacky restaurant chains that litter the landscape. San Francisco with its $15 minimum wage and several surrounding cities are on track to do just that. What will be left is fine dining where an $18 martini is a bargain.
Where all the immigrants flocking to the San Francisco “sanctuary city” area will work is going to be problematic as national chains as well as “Mom and Pop” businesses close or leave the market.
The fascinating part about this entire issue is that the unions, which are funding and driving these wage increase battles, want to sign up new employers so they can offer contracts below the minimum wage which is legal if the firm signs a union contract. Essentially the offer is, “Sign with us now to survive and we will wait a year or three before our demands drive you into bankruptcy.”
Both San Francisco and Seattle, which similarly increased their minimum wage, are beginning to see evidence that it's costing them jobs, tax revenue and, in the long run, tourism revenue as choices to shop and eat narrow.
Don’t be surprised to see more poor working people move south to find work in counties without politically correct giant minimum wage increases looming with businesses that can afford to stay open and hire new employees.
Why is Grandma so cheap?
Since I am now a grandpa and now find myself grumpy over the costs of goods and services — no, I'm not even going to talk about my drought surcharge since it’s bad for my blood pressure — I thought I would, for fun, review some prices from the past.
The attached image is a little comparison to see where we have been and, frighteningly, where we are headed.
Historically, it would appear you should advise Junior to drop out of college and be a potato farmer. The numbers for gasoline and utility costs so wildly fluctuate they are just too depressing to list in this piece, but it does explain why Grandma shudders when one of the kiddos wants a little $4.99 toy hanging by the check-out stand
That would have been half a week’s grocery budget in the early '60s.