Your Money or Your Schools
As a child, I was fond of adventure stories about the exploits of pirates, highwaymen, and miscreants of all sorts. In every such tale there was the moment when the dashing if disreputable protagonist confronts a gaggle of respectable folk and proclaims, "Stand and deliver. Your money or your life!" At the age of eight, armed with capguns and sporting a red bandana, I thought those were words to live by.
Today, they are just words for politicians to live by.
Like Dick Durbin, Obama's Senate buddy from Illinois, who used the recent Dallas tornado outbreak to warn voters to dump their gas-guzzling Silverados and sign up for hybrids. Durbin was about as subtle as Blackbeard grabbing the gold before shoving his victims off the plank. "It's your money or your life," Durbin insisted. Resistance is futile. Turn over the entire economy to power-crazed regulators at the EPA, or you will be carried off like Dorothy in The Wizard of Oz.
For Democrats like Durbin and Obama, tutored in the Chicago Way, this kind of extortion is as natural as breathing. Find something voters care about -- like their lives -- and threaten to take it away. If they pay up, maybe they can keep it until next time.
That seems to be what Gov. Jerry Brown is up to in the Golden State. On May 12, Brown posted his own "money or your life" extortion video online. In his Address to the People of California, he stated that the state budget is facing a $16-billion shortfall. Amid lower-than-expected tax receipts and with the Democrat-controlled legislature refusing to make necessary spending cuts, Brown insists that he has no choice but to raise taxes. That's why he is proposing a "temporary" ("ha!") sales tax increase of one-fourth of one percent and a "temporary" 7-year income tax surcharge of an additional 3% for those earning over $250,000. Those increases would make California, from a tax viewpoint, the least attractive state in the country for high earners to reside in. With a top marginal rate of 13.3%, California would drive more and more affluent residents out of the state, thus lowering receipts further. And that would necessitate more tax increases down the road.
Most thoughtful persons recognize that driving high earners out of the state is not the solution. Brown seems not to be acquainted with the Laffer Curve, since he thinks there is no limit to what rich folks are willing to pay in taxes. Maybe he is just intent on grabbing a larger share of the Facebook bonanza soon to be distributed with that company's record-setting IPO. If so, he is not aware that one of Facebook's largest shareholders has already pulled up stakes, renounced his citizenship, and moved to Singapore. What makes Brown think that affluent Californians won't move to Nevada and Texas, which are both a lot closer?
Still, Brown is intent on doing what pirates do. On May 14, he is disclosing exactly what cuts he intends to make if voters fail to approve his plan on the November ballot. He has already made clear that the bulk of those cuts will come in education, public safety, and senior and low-income spending -- which is a lot like the highwayman of yore shouting "Your money or your life." Taxpayers would be well-advised to ask why there is no other choice.
Wouldn't it be possible, for example, to trim the state's $1.307-billion spending on environmental protection rather than nudge seniors off the plank? How about the $9.548 billion devoted to "general government" expenses? Perhaps some of those billions could be applied to prevent shortening the school year by three weeks, as Brown is threatening. Then there's the treasure chest of $42.893 billion for health and human services. Cutting those "services" by a third would just about cover the deficit.
A comparison of California's per capita spending with that of other, more successfully governed states demonstrates that a great deal could be cut from the state's budget. For some reason, pirates like the ones hanging out in Sacramento never seem to think of that. They just keep on doing the pirate thing. "Your money or your life."
In California, actually, it's more like "your money and your life." Despite bloated spending on education, students in California scored near the bottom in a recent national ranking of standardized achievement test scores. For 2010, Education Week ranked California students at 46th in the nation in academic achievement. And that despite the fact that California spent $39.215 billion on K-12 education.
One state that spends a lot less did a lot better. According to its 2010-2011 budget report, the state of Tennessee spent $5.254 billion on K-12, yet its schools ranked 21st in a national ranking by the Education Research Center. Tennessee currently spends $8,695 per student, while California spends $9,706. Despite the higher spending, California has the worst student-to-teacher ratios in the country and some of the nation's worst educational outcomes.
Rather than pay the highwayman, Californians might do well to move to Tennessee (which, by the way, has no state income tax, regardless of whether one earns $10,000 or $10 billion). Once Jerry Brown publishes his "stand and deliver" ultimatum, threatening state residents with even worse student-teacher ratios, shorter school years, and less police protection, that may be just what happens.
Already, Californians are moving to no-income-tax states in droves. In 2009-2010 alone, nearly 70,000 Californians moved to Texas. Maybe they like the fact that they won't have to hand over 13.3% of their income in return for underperforming schools and dismal public services. Or maybe they are just tired of the whole highwayman routine.
Jeffrey Folks is the author of many books and articles on American culture, including Heartland of the Imagination (2011).