No new taxes? Not exactly
There’s one key phrase that keeps getting repeated every time Gov. Arnold Schwarzenegger talks about his purported 20-year, $222 billion statewide construction program, his solar incentive and his proposed budget for next year: “No new taxes.”
But it ain’t necessarily so.
For it all depends on what is a tax. If a tax is something you have to pay in order to keep living as you do, then these plans are replete with tax increases and continuations of last year’s tax increases. The same if a tax represents money one must pay unexpectedly to government.
Schwarzenegger, for example, plans no increase in university, college or community college fees next fall, but also plans no reductions. This will “make life easier” for students and their families, he said. But Schwarzenegger and the Legislature increased those fees by an average of about 10 percent last year, causing hardships among University of California and Cal State students and spurring tens of thousands of dropouts from community colleges. Keeping fees at last year’s levels won’t be much relief to most California families, whose typical income increase from last year is in the 2-3 percent range.
Then there are schoolteachers, almost all of whom spend hundreds of their own dollars yearly on school supplies for children in their classes, everything from glue to pencils, chalk and construction paper. They do this on an average salary of $38,845 for elementary and high school teachers. In the late 1990s, legislators and then-Gov. Gray Davis voted them a tax credit of $250 to $1,500 per year, both as reimbursement for the supplies and as an incentive to stay in the schools.
For the second straight year, Schwarzenegger proposes to suspend this credit, meaning teachers will pay hundreds of dollars more than most had reason to expect.
Then there’s the governor’s solar incentive plan, designed to put solar panels on more than 1 million roofs statewide.
This will be underwritten largely by customers of the state’s four big utility companies, Southern California Edison, Pacific Gas & Electric, San Diego Gas & Electric Co. and Southern California Gas Co.
Apartment dwellers and homeowners without any interest at all in solar power will soon see an additional line on monthly gas and electric bills, with average residential PG&E customers paying an additional $17 a year and those in Southern California between $14 and $18 per year more.
The idea is to give the state’s solar industry a boost, and it should. Homeowners and businesses buying the typical $20,000 array of solar panels can expect to benefit by about $7,000 from Schwarzenegger’s plan.
This idea never came close to making it through the Legislature, in part because Democrats wanted to attach a requirement that all the work be done by union labor, while Republicans wouldn’t tolerate any such thing. So Schwarzenegger went to his compliant appointees on the state Public Utilities Commission, who quickly approved the plan by a 3-1 vote.
Not a tax? Try not paying and see what happens.
Schwarzenegger is sometimes accused of balancing his budget on the backs of the poor, the poorest of whom will see cost of living increases for supplemental security income (which goes to seniors, the blind and disabled) delayed for two years. The solar incentive plan provides more reason for the poor to complain.
Not many welfare recipients will be interested in laying out $20,000 for solar panels and then getting $7,000 back, for a net expense of $13,000, to be amortized over many years of lowered electric bills. Most solar buyers, as usual, will be middle class or wealthy homeowners, plus some businesses.
This may, as Schwarzenegger asserts, save everyone money in the long run by reducing the amount of power utilities and the state must buy. It will also let those who install solar equipment sell any extra power produced by their arrays back to the utilities.
Put it all together and this year’s Schwarzenegger proposals don’t look much different from last year’s, also presented with a “no new taxes” claim. Back then, teachers also lost their tax credit, students paid more or were forced to leave school and COLAs for the poor were minimized.
Which shows that Schwarzenegger’s no new taxes claims usually mean only that the classes of people and businesses he favors won’t pay more, but many others will, even if what they pay is called something other than a tax.
For full details of Gov. Schwarzenegger’s solar incentive program, go to http://www.cpuc.ca.gov/static/energy/051214_solarincentive.htm
Thomas D. Elias is a syndicated columnist whose work appears in The Union. Contact him via e-mail at email@example.com.
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