L.A. Voters May Be Saying Something About Government Tax and Spend Policies

The sequester has been in effect for a few days now. My sense is that lots of people aren't siding with the President about the need for additional tax increases as a justification to maintain government spending at its current level.

Maybe enough of We the People have finally correctly decided that there is a whole lot of waste in government that needs to be eliminated before we automatically agree to give the government knows best gang any more money to spend on our behalf.

If what happened in L.A. yesterday is any indication, there's at least a glimmer of hope for a return to some semblance of fiscal sanity in government, at least in California. And if Californians can do something sensible about taxes and government spending, why not the rest of America?

Tax Hike Rejected has the California case for cautious optimism:

"Finally, some fiscal sanity is emerging in California. Well, sort of.

By a 10-point margin, Angelenos yesterday struck down a ballot measure to raise the city's sales tax by a half-cent to 9.5%, which would have made it among the highest in the country. Los Angeles Mayor Antonio Villaraigosa, LAPD chief Charlie Beck, city council president Herb Wesson and the unions warned that city hall would have to lay off 500 cops without the additional $211 million in revenues, which could cause an increase in crime.

Uh huh. Voters may have heard city hall cry wolf too many times. In 2006, the city raised trash fees purportedly to hire more police officers. In 2008, city pols campaigned for a 9% cell phone tax to raise $243 million to bolster public safety. A few months after voters approved the cell phone tax, the city raised trash and parking fees with the stated intention of putting more cops on the street. All told, the city has raised over $500 million in revenues (on an annual basis) since 2006 to support public safety.

In fact, most of the money has been used to shore up the city's retirement funds—and there's little doubt that the tax increase on the ballot yesterday would have served the same purpose. Los Angeles's $848 million retirement bill (most of which is for public safety) is projected to jump to $1.3 billion in the next four years. Meanwhile, most cops don't pay a penny for their health benefits and can retire at 55 with a pension equal to 90% of their highest salary."

Summing Up

Hope springs eternal.

But when it comes to public sector pension underfunding, we haven't had much reason for hope.

Until now, that is.

So in cities like Los Angeles and states like California, it's either getting down to voters deciding to insist that government officials cut the waste, cut the retirement benefits, cut the staffing, cut the education budget or cut the public safety funding. But for once they weren't willing to vote to raise taxes.

L.A. voters think they're already paying enough taxes.

My guess is the rest of America feels the same way.

Thanks. Bob.