Patrick M. Gleason

Stay Classy Sacramento

Posted by Patrick M. Gleason on Thursday, May 21st, 2009, 4:09 PM PERMALINK

It's stuff like this that helps people understand the decline of traditional news outlets:

The Sacramento Bee, in an editorial posted earlier today, thought it would by wise to employ the tone of smartass junior highschooler while berating their readers for rejecting a $16 billion tax hike in Tuesday's special election:

HEADLINE: "You did it! Uh, so what now?"
TEXT: Good morning, California voters. Do you feel better, now that you've gotten that out of your system?
You wanted to show the state's politicians just how mad you are at them. And you did. Boy, did you ever. ...
... you're sick and tired of all this political mumbo-jumbo. So you showed those politicians who's in charge. You. You're now officially in charge of a state that will be something like $25 billion in the hole for the fiscal year beginning July 1.
So, now that you've put those irksome politicians in their place, maybe it's time to think about this: Since you're in charge, exactly what do you intend to do about that pesky $25 billion hole in the budget?
Well after several hundred comments expressing outrage, the SacBee editorial board thought perhaps it would be best to back track (nevermind the fact that journalists have an ethical duty to stand by their published work). The editorial was taken off the SacBee website and replaced with the following:
Note to our readers: Many of the comments below refer to an article that was posted in error. That article was a draft prepared for internal discussion among members of The Bee's editorial board. Such discussions are a routine part of our work, and frequently lead to editorials that are considerably different from writers' first drafts.
That's what happened in this case. After discussion, we decided that our initial editorial about the special election should take a different tack. The result was the editorial that now appears on this page. This editorial is the only editorial about the special election that appeared in Wednesday's editions of The Bee.
David Holwerk, Editorial Page Editor, The Sacramento Bee
As has been mentioned here before, unlike the SacBee editorial board and their leftist ilk, conservatives and libertarians tend to be a rather pleasant and content bunch. And unlike the bitter liberal in chief Keith Olbermann, we don't spend everyday making lists of the worst people in the world. But if, hypothetically, we did, the entire Sacramento Bee editorial board would certainly make that last.
Way to insult your readers, Sacramento Bee. That should definitely help with subscriptions. You stay classy.

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Arizona Senate Appropriations Passes 2010 Budget Sans Tax Increases

Posted by Patrick M. Gleason on Thursday, May 21st, 2009, 2:42 PM PERMALINK

Cheerful news to report out of Arizona:

Yesterday the Senate Appropriations Committee passed a budget FY 2010 that closes the state's $3 billion deficit. Lawmakers closed the gap through privatization, spending cuts, asset sales, bonding, and fund sweeps.

Most importantly, the plan does not include any tax increases.

Arizonans thought they were entering an era of conservative executive leadership when Janet Napolitano left for DC and was replaced by Secretary of State Jan Brewer. However, shortly after taking office, Gov. Brewer proposed an 18%, billion dollar per year, sales tax increase in the middle of a recession. It is unclear who is advising her to do this but they apparently never took Economics 101.

In a move that will help expedite the state's economic recovery, the Senate budget plan also includes permanent repeal of the state property tax. The state property tax had been suspended but is slated to come back at the end of this year. Permanent repeal will provide Arizona residents $250 million in property tax relief this year by preventing its reinstatement. Now that's stimulus.

Gov. Brewer, who is apparently desperate to lose her first gubernatorial primary, has not only stuck by her calls for a tax increase but has promised to veto any budget sent to her by the legislator that does not sock it to Grand Canyon State taxpayers.

The Senate Committee's approval of a tax-hike free budget to the majority Arizonans. According to a poll by Rassmussen Reports, an overwhelming majority of Arizonans oppose closing the budget gap with a tax increase, even a temporary one.

Stay tuned for the latest on this budget fight that is of national importance.

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Texas House to Vote on Massive Gas Tax Increase

Posted by Patrick M. Gleason on Thursday, May 21st, 2009, 11:11 AM PERMALINK

The Texas House of Representatives will hold a vote later today on the House version of Senate Bill 855, legislation that would permit a substantial gas tax increase. ATR has repeatedly expressed opposition to this legislation throughout the session (see here, here, and here).

SB 855 permits certain Texas counties, virtually every large to moderately-sized population center in the state, to levy a 10 cent gas tax increase. House Bill 9, which would index the state gas tax for inflation, effectively putting further state gas tax increases on autopilot, is expected to be rolled into SB 855 today. The result: a very large increase in transportation taxes paid by Texas motorist.

A recent study by the Texas Public Policy Foundation shows how indexing alone will cause a gas tax increase every bienium that is equal to 15% of the current rate. TPPF has also produced an informative study on the effect that SB 855 would have on Texas motorists.

ATR joins TPPF and Texans for Fiscal Responsibility in asking lawmakers to prioritize current transportation funds better, utilize existing taxing capacity, and end diversion of transportation funds for non-transportation purposes before even considering raising gas taxes.

The Texas legislature diverted $1.6 billion in transportation revenues from the current budget for non-transportation purposes. The budget for the coming biennium continues these diversions to the tune of $1 billion.

The county-level tax increase, combined with indexing of the state gas tax will require Texas families to cope with a 125% increase in non-federal gas taxes. This would be the 4th time that TX gas taxes have been ratcheted up since the mid-80s and will only exacerbate the pain felt by TX motorists when gas prices rise every summer driving/vacation season. 

Economists of all political stripes agree that tax hikes should be avoided at all costs during a recession. What's worse, SB 855 would punish Texans every time they commute to work, pick their kids up from school, or go to the grocery store.

Furthermore, a vote in favor of SB 855 will be scored as a violation of the Taxpayer Protection Pledge, which has been signed by 29 TX House members (20% of that chamber). will report later today on whether any Lone Star State lawmakers broke their Pledge. Stay tuned...

California Assemblyman Chuck DeVore Discusses What Ails the Golden State

Posted by Patrick M. Gleason on Wednesday, May 20th, 2009, 6:42 PM PERMALINK

Califonia Assemblyman and Taxpayer Protection Caucus Chairman Chuck DeVore (R-Irvine) held a conference call with bloggers yesterday afternoon to discuss the significant and numerous challenges facing the state of California.

DeVore displayed a depth of knowledge about the real problems facing the Golden State and a grasp of the facts that is simply not held by any members of the majority in the CA legislature. DeVore did a great job of explaining why the state's problem is overspending, not a lack of revenue.

DeVore informed call participants that spending has increased 100% over the past 10 years. As this website has previously mentioned, since 1991, CA lawmakers have increased spending by 300%. Had spending been limited to population growth and inflation since that time, the state would be sitting on top of a $15 billion surplus rather than facing a more than $21 billion defiict.

As another example of the gross overspending that has brought a great state to the brink of fiscal insolvency, DeVore pointed to that fact that California welfare spending is 3 times greater than the national average. Need further proof of the fiscal mismanagement and bureaucratic redundancy weighing down California's economy, DeVore has it. For one example, "there are 3 agencies that oversee the use of agricultural pesticides," said DeVore.

Despite California voters sending an overwhelming message yesterday that business as usual in Sacramento cannot continue, DeVore predicts this indisputable message from voters will fall upon deaf ears in the Democrat majorities in the legislature.

The Assemblyman and candidate for U.S. Senate believes California Democrats will take one of two routes to avoid necessary reforms:

1) Push a "scorched Earth" budget in which popular services are cut (but leaving alone the wasteful and unnecessary spending that benefits the special interests of the Left such as the public employee unions) as a way to punish voters who rejected the massive tax hikes found in Proposition 1A.

2) Attempt to illegally pass further tax increases with a simple majority, as was attempted last December, rather than with the constiutionally mandated 2/3rds majority. The Howard Jarvis Taxpayers Association has already announced that it will legally challenge any such attempt.

DeVore is also heavy on solutions. One of his proposals that ATR supports is tapping of the vast oil reserves found in the waters off of California's coast. DeVore mentioned the fact that there are at least 9 billion barrels of oil off California's coast and at least 1 billion barrels are located in waters that are solely controlled by the state. DeVore noted that the barrels found in state controlled waters alone could generate $5 billion for the state right away via securitization. Furthermore, he noted that these reserves can be tapped in an environmentally sensitive way with slant drilling, which requires no new rigs.  ATR testified in favor of drilling off the California coast at a Minerals Management Service hearing in San Francisco last month.

One thing that was made clear yesterday, it's going to be an interesting next few months at the California Capitol. Stay tuned to this website for future updates on the California budget.

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California Voters Overwhelmingly Reject Tax Hikes in Special Election

Posted by Patrick M. Gleason on Wednesday, May 20th, 2009, 11:02 AM PERMALINK

Americans for Tax Reform applauds California voters for rejecting propositions A1-E in yesterday’s special election. The lynchpin measure on the ballot, Proposition 1A, which would have extended $16 billion in tax hikes, was soundly defeated. With 100 percent of precincts reporting, over 65 percent of California voters rejected 1A and the $1,100 in new taxes per household that it would have assessed. 

Not one of Propositions 1A-E received more than 38 percent of the vote. The only measure to pass, Proposition 1F, was approved with over 74 percent of the vote. Proposition 1F prevents pay increases for legislators when the budget is not in balance. With the failure of Props 1A-E, lawmakers must now go back to work and address a $21.3 billion deficit.

“California does not have a $21.3 billion deficit; it has a $21.3 billion overspending problem. The voters of California have sent an unequivocal message to the politicians in Sacramento – the budget process is broken and taxpayers have been squeezed dry.” said Grover Norquist, president of Americans for Tax Reform. “Despite a well funded campaign for billions of dollars in new taxes, in one of the highest taxed states in the nation, voters saw through the misinformation spread by proponents of Prop 1A.”

California spending has nearly tripled since the early 1990’s, while revenues have increase 167%.  If California had limited its spending to population growth and inflation since 1991, the state would be sitting on a $15 billion surplus. California lawmakers will hold a series of press events today to announce their various proposals on how to move forward with the budget. 

“The fiscal mess that California has become provides a preview of what will happen nationwide if the tax and spend policies of Obama, Reid, and Pelosi are carried out” added Norquist. “It is time to address the true problem in California: gross overspending. Now more than ever the Golden State must begin to live within its means and make the tax climate more competitive. In yesterday’s special election voters sent a loud and clear message to politicians in Sacramento that business as usual can’t continue.”

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Schwarzenegger Unveils Budget Revisions - Californians Vote on $16 Billion in New Taxes Next Week

Posted by Patrick M. Gleason on Friday, May 15th, 2009, 10:43 AM PERMALINK

If it's May then you know it's time for the annual California budget revision and yesterday Gov. Schwarzenegger unveiled two proposals for the current fiscal year.The budget revisions come amidst the setting a $21 billion state overspending problem.

The last budget agreement that passed in February intended to address the state's then $40 billion overspending problem. That budget raised the state's income, sales, and car taxes by approximately $16 billion and set the stage for next week's special election in which Californian's will decide if they want to double down and add yet another $16 billion in new taxes, borrow from the lottery, and divert money from various dedicated funds. For ATR's analysis of the May 19 special election ballot measures, Click Here.

The Governor's plans entail billions of dollars in long overdue spending cuts that are certain to be met with staunch resistence by the state's powerful unions and other spending interests.For details on the two revised budget plans, click here and here.

The Propositions on next week's ballot that affect the current budget are 1C-E. If those pass the state will need to find a little over $15 billion in cuts. If they fail, as appears to be the likely outcome, the state will need to find approximately $21 billion in cuts. While Schwarzenegger has socked it to taxpayers already this year at one of the worst times to do so, and while his revised budget plans are far from perfect, ATR commends the Governor for not including further tax hikes in his two proposals. Taking a very positive step in the right direction, the Governor's plans also call for long overdue divestiture of various state assets.

If higher taxes were the answer then California, home to the highest sales and income tax rates in the country, would be in perfect shape. Reality shows otherwise. Based on the latest polls, it looks as though Californians are going to send a message to lawmakers next week that raising the state's draconian tax burden further will not be tolerated.

The problem in California is overspending and until that is brought under control, the state will continue to be a fiscal trainwreck. The state has simply been living beyond its means for far too long. Last year California spent $33 billion more than it brought in. Golden State spending has risen 300% since 1991. As Reason Foundation Policy Analyst Adam Summers pointed out in a recent study, had the state limited spending to the rate of population growth and inflation, the state would be sitting on a $15 billion surplus rather than staring down the barrel of a $21 billion deficit.

Taxpayers all over the country should have their eyes what happens in California, as Golden State tax and spenders are attempting to put all American taxpayers on the hook for the state's profligate ways.

ATR urges all Californians to get to the polls next Tuesday, reject Props 1A-F, and send a loud and clear message to the politicians in Sacramento that the taxpayer well has run dry and the state needs to get its fiscal house in order once and for all.

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Bill Permitting 125% Gas Tax Hike Passes Texas House Transportation Committee

Posted by Patrick M. Gleason on Wednesday, May 13th, 2009, 7:47 AM PERMALINK

ATR has repeatedly expressed opposition to HB 9 and SB 855, transportation tax legislation pending in the TX legislature.

This legislation, which would permit a 125% gas tax increase on Lone Star State motorists, passed the TX House Transportation Committee late Monday evening. Despite the fact that we are in the midst of a recession, too many TX lawmakers think it is prudent to make it more expensive to commute to work, get the kids from school, or go to the grocery store. What's worse energy prices are already set to skyrocket if Obama has is way on cap and trade. Proponents of HB 9/SB 855 feel the need to pile on.

Furthermore, this legislation is unnecessary. Justin Keener, Vice President for Policy and Communications for the Texas Public Policy Foundation, notes that the "legislature and several local leaders cannot look taxpayers in the eye and say they took even commonsense steps to avoid a tax increase. As these tax bills are heading for passage, lawmakers are putting the finishing touches on a budget that will continue to divert billions of dollars in transportation taxes to non-transportation purposes." Keener goes on to add that "many cities in the regions seeking increased taxes have chosen not to use their sales-tax authority for transportation projects. Whatever happened to setting priorities with our existing tax dollars before going to the taxpayers and seeking more?”

ATR will continue to reach out to Pledge signers in the House, other responsible lawmakers, and Gov. Rick Perry to defeat this misguided piece of legislation.

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Gov. Pawlenty Possibly Coming to Defense of Internet Freedom

Posted by Patrick M. Gleason on Tuesday, May 12th, 2009, 2:44 PM PERMALINK

ATR has been periodically reporting on the Minnesota Department of Public Safety's quixotic effort to censor the internet by ordering 11 of the largest internet service providers in the nation to block access to 200 online gaming sites.

MN Rep. Pat Garofolo responded by introducing legislation, HF 2370, that would circumvent the DPS's order. Click here to view the letter that ATR sent to all members of the Minnesota legislature last week in support of HF 2370.

ATR has since learned from MN state officials that Gov. Tim Pawlenty (R) will likely reverse the DPS's unlawful order based on the fact that the DPS does not have jurisdiction over the internet, which spans 150 countries worldwide.

A reversal of the DPS's order will also prevent a tremendous misallocation of scarce state resources and save the Minnesota taxpayers from a hefty tab in legal fees.

In response to the DPS's actions, the Internet Media Entertainment & Gaming Association (iMEGA) has filed suit against John Willems, Director of the DPS's Alcohol & Gambling Enforcement Division. ATR fully concurs with iMEGA's contention that the state of Minnesota does not have jurisdiction over the internet and that the DPS's action violates the Constitution's Commerce Clause.

Unfortunately this is not Minnesota's first foray into stifling e-commerce. In 2005 the state issued regulations to prevent Minnesotans from ordering wine online from in-state and out-of-state wineries. That action, too, drew a lawsuit.

ATR looks forward to a reversal of the DPS's unlawful action and avoidance of the horrible precedent that it would set.

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Minnesota State Representative Pat Garofalo Comes to Defense of Internet Freedom

Posted by Patrick M. Gleason on Tuesday, May 5th, 2009, 11:20 AM PERMALINK

Yesterday Minnesota State Representative Pat Garofalo (R-Farmington) introduced legislation that would circumvent the MN Department of Public Safety's attempt to block access to 200 online gaming sites in the North Star State.

As was previously mentioned on this site, John Willems, director of the MN Dept. of Public Safety's Alchohol & Gambling Enforcement Division and apparently a huge fan of China's internet censorship policies, sent a letter to 11 national and regional internet service providers, instructing them to block access to 200 gaming websites in Minnesota.

Americans for Tax Reform vehemently opposes Willems' quixotic attempt to stifle freedom of the internet, which represents a fatuous waste of taxpayer dollars and scarce state resources.

ATR will continue to work with Minnesota lawmakers to secure expeditious passage of Rep. Garofalo's bill.

Stay tuned for further updates.

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North Carolina Senate Proposal Raises Taxes by $1.7 Billion

Posted by Patrick M. Gleason on Monday, May 4th, 2009, 3:39 PM PERMALINK

Americans for Tax Reform today announced opposition to the NC Senate’s “21st Century Tax Rate Reduction and Modernization Plan”. While some positive reforms are found in this proposal, it ultimately results in a $1.7 billion tax hike on North Carolinians over the next two years. This plan would significantly increases the income tax on most individuals and families, expand the sales tax, hike tobacco and alcohol taxes and eliminate numerous tax credits and deductions. It is estimated that when fully phased in, this plan will hike state and local taxes by over $850 million every year, exceeding the $500 million in unspecified tax hikes called for in the recent budget.
Under the Senate’s plan, the method used to calculate income tax rates is altered to result in substantially higher taxes on almost all North Carolina residents. The plan will extend the state sales tax to include digital products, warranties, movies, recreation, real property, storage & moving, building & repairs, web based and other information services, while simultaneously limiting the refund for nonprofit organizations such as hospitals. The cigarette tax would increase by 15 cents a pack, and North Carolina would collect an additional $44 million a year in increased alcohol taxes. Other proposed tax hikes include applying the franchise tax to all limited liability businesses and local tax hikes.
“As working North Carolina families are struggling just to make ends meet, their senators want to take even more of their money to make up for chronic government overspending. There is one thing economists of all political stripes can agree upon: the last thing you want to do in a recession is raise taxes, yet the North Carolina Senate wants to do just that – to the tune of a whopping $850 million a year” said Grover Norquist, President of Americans for Tax Reform.  “Everyone will be worse off after these tax hikes. Income tax hikes will hit families already struggling to put food on the table. Increasing the sales tax base will force businesses to shed jobs, or even close their doors. Increasing the alcohol tax, and taxing ‘recreation’ will decimate the hospitality sector. Furthermore, raising the cigarette tax, which has been proven failure when it comes to raising revenue, targets the state’s poorest residents. Everyone will suffer to make up for the state government’s profligate ways.”
North Carolina currently ranks a dismal 39th in Business Tax Climate nationally. According to the Center for Fiscal Accountability, North Carolina taxpayers already work 191 days – more than half the year – just to pay off the cost of government. Under this proposal, every individual earning over $60,000, and every family earning over $70,000 will see a sharp rise in their income tax: individuals earning $100,000 can expect to pay a an additional 10% in state income tax alone. When fully phased in, this plan will cost every North Carolina household additional $250 a year in taxes.

“By calling this blatant cash grab a ‘tax rate reduction and modernization plan’ the North Carolina Senate is channeling 1984 to the extreme: this is an example of Orwellian doublespeak at its finest” added Mr. Norquist. “North Carolina must cure itself of its addiction to overspending and stimulate the economy by reducing the burden of government. This plan does just the opposite: it is bad for families, bad for employers, and bad for the Old North State.”

Below is a chart put together by the Civitas Institute of Raleigh that details the effect of the Senate's tax increase over the next two years:


FY 2010-11
FY 2011-12
FY 2010-11
FY 2011-12
Income $264.70 $343.50    
Sales $66.10 $83.60 $244.30 $261.30
Business* $105.50 ($5.40) $41.50 $45.60
"Sin" Taxes $123.20 $123.50    
IRC Conform** ($4.30) ($2.70)    
Total $555.20 $542.50 $285.80 $306.90

*Corporate tax rate to be phased down to 5.8% then 4.5% over two years
**Changes to conform to federal internal revenue code changes



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