Thursday, March 5, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Rainy-day fund not best option, but perhaps only one

walters column sig

By
From page A9 | May 11, 2014 |

State Controller John Chiang reported Thursday that after counting April’s income tax payments, revenue is running $2.2 billion above assumptions in the current state budget.

The windfall continues a boom-and-bust pattern that has marked state finances for decades – big increases in revenue when the economy is in an up-cycle and big drops when it fades. The swings have gotten wider because the state has become more dependent on volatile personal income taxes, especially capital gains from the state’s most affluent taxpayers.

A big chunk of the extra money will automatically be set aside for schools under a mind-numbingly complex constitutional provision.

However, Gov. Jerry Brown and the Legislature have options on the remainder: spend it on more government programs, pay down the state’s debts ($340.7 billion according to a report this week), leave it in the bank to cushion the impact of a future down-cycle, or even reduce taxes.

In years past, the tendency of the Capitol’s politicians has been to squander windfalls, then face deficits when the inevitable economic downturn comes.

However, the current political crop, from the governor down, is claiming to have learned a lesson and now wants to create a rainy-day fund to capture some windfall money.

As Chiang was reporting the newest windfall, Brown and legislative leaders were finalizing a proposal for such a fund that would go on the November ballot, replacing one that predecessor Arnold Schwarzenegger had pried from a reluctant Legislature.

It’s progress, one supposes, that politicians indirectly admit that they cannot be trusted to do the right thing when windfalls occur, and are willing to impose some restraints on themselves.

However, even if the measure is placed on the ballot and approved by voters, it cannot be airtight. The clever people in and around the Capitol have demonstrated many times that they can find ways around seemingly explicit constitutional provisions.

Indeed, the aforementioned school finance law, passed by voters in 1988, has been manipulated on numerous occasions when it interfered with what Capitol politicians wanted to do.

A better approach to revenue volatility would be to overhaul the tax system so that revenue would become more predictable, making it less dependent on income taxes from a tiny fraction of the population.

A good tax system, either sales or income, has a broad base and low rates, but California’s is just the opposite, with high rates on narrow bases. It therefore is much too sensitive to even tiny changes in the economy.

Tax reform isn’t happening for a variety of political reasons, however. Since politicians are admittedly untrustworthy when it comes to spending money, we are left with a rainy-day fund – in effect, an indirect spending cap – as the only viable option.

Dan Walters is a columnist for the Sacramento Bee. Reach him as [email protected]

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

 
Show resilience in the face of adversity

By Mayrene Bates | From Page: A2

 
Students sample industry choices during school career fair

By Glen Faison | From Page: A3 | Gallery

 
Real McCoy II Ferry set for maintenance

By Kevin W. Green | From Page: A3

 
Vacaville police slate annual awards ceremony

By Kevin W. Green | From Page: A3

Limited damage to apartment from carport fire

By Kevin W. Green | From Page: A3 | Gallery

 
Friday concert benefits Families Helping Families

By Amy Maginnis-Honey | From Page: A4

 
Vallejo police arrest 4 in connection with 3 killings

By Kevin W. Green | From Page: A4

 
National Red Cross Month celebrates heroes

By Susan Hiland | From Page: A4

Il Fiorello schedules citrus class

By Susan Hiland | From Page: A4, 1 Comment

 
Jury convicts ex-con who served as own lawyer

By Jess Sullivan | From Page: A4

Red Carpet Gala to benefit theater foundation

By Amy Maginnis-Honey | From Page: A4

 
Pet remembrance event set in Vallejo

By Amy Maginnis-Honey | From Page: A4

 
Fairfield police log: Tuesday, March 3, 2015

By Susan Hiland | From Page: A10

Suisun City police log: Tuesday, March 3, 2015

By Susan Hiland | From Page: A10

 
.

US / World

 
Justices sharply divided over health care law subsidies

By The Associated Press | From Page: A1

 
Children in Southern California breathing easier, study says

By The Associated Press | From Page: A4 | Gallery

Failures by 3 governments preceded homeless man’s death

By The Associated Press | From Page: A4, 1 Comment | Gallery

 
Second Los Angeles hospital reports ‘superbug’ infections

By The Associated Press | From Page: A4

 
California lawmaker pushes child care worker vaccinations

By The Associated Press | From Page: A4

 
Obama signs Homeland Security funding bill into law

By The Associated Press | From Page: A5, 1 Comment

House panel issues subpoena for Clinton’s personal emails

By The Associated Press | From Page: A5

 
 
A defiant Alabama regains ground against gay marriage

By The Associated Press | From Page: A5

How much sugar is in that? 7 foods with added sugar

By The Associated Press | From Page: A5 | Gallery

 
Microsoft co-founder says he found sunken Japan WWII warship

By The Associated Press | From Page: A6

 
Coal mine blast kills at least 24 in war-torn east Ukraine

By The Associated Press | From Page: A6 | Gallery

.

Living

Today in History: March 5, 2015

By The Associated Press | From Page: A2

 
Community Calendar: March 5, 2015

By Susan Hiland | From Page: A2

Horoscopes: March 5, 2015

By Holiday Mathis | From Page: A9

 
I can’t tell if I still want to be married, or just don’t want to be alone

By Kathy Mitchell and Marcy Sugar | From Page: A9

.

Entertainment

DiCaprio partners with Netflix for series of documentaries

By The Associated Press | From Page: B4

 
‘Guardians of the Galaxy’ tops MTV Movie Awards nominations

By The Associated Press | From Page: B4

Glen Campbell children fighting wife’s control of affairs

By The Associated Press | From Page: B4 | Gallery

 
.

Sports

 
Posey has 2-run double in Giants’ 9-2 loss to A’s

By The Associated Press | From Page: B1

Local report: Vanden softball slips by Rodriguez with late run

By Daily Republic staff | From Page: B1

 
Curry shoots Warriors to 102-93 victory over Bucks

By The Associated Press | From Page: B1

 
Former player Nate Jackson calls for NFL to allow marijuana

By The Associated Press | From Page: B2

Phoenix to install tire barriers before NASCAR visit

By The Associated Press | From Page: B2

 
Pirelli sticks with same tire choices for first 4 F1 races

By The Associated Press | From Page: B2

AP Source: Peyton Manning returning for 18th NFL season

By The Associated Press | From Page: B2

 
NCAA reports big jump in home runs with new flat-seam ball

By The Associated Press | From Page: B2

MLS, players agree in principle to 5-year deal

By The Associated Press | From Page: B2

 
Prosecutors can’t bring up Florida shooting in ex-NFLer case

By The Associated Press | From Page: B2

Vikings agree to trade Cassel to Bills

By The Associated Press | From Page: B2

 
Scott opens a season of change at Doral

By The Associated Press | From Page: B2

‘It WAS him': Defense admits Tsarnaev bombed Boston Marathon

By The Associated Press | From Page: B2

 
With Peterson’s status in question, Vikings pay a visit

By The Associated Press | From Page: B2

NFL stadium supporters in LA suburb file ballot paperwork

By The Associated Press | From Page: B2

 
Alex Johnson, AL batting champ in 1970, dies at age 72

By The Associated Press | From Page: B2

Goodell: NFL responsible for Super Bowl seating problems

By The Associated Press | From Page: B2

 
.

Business

.

Obituaries

Aaron D. Malave

By Nancy Green | From Page: A4, 1 Comment

 
Cesar Luis Garcia-Regalado

By Susan Hiland | From Page: A4

Rodolfo Landabora Porquez

By Susan Hiland | From Page: A4, 1 Comment

 
.

Comics

B.C.

By Daily Republic Syndicated Content | From Page: A8

 
Garfield

By Daily Republic Syndicated Content | From Page: A8

Rose is Rose

By Daily Republic Syndicated Content | From Page: A8

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: A8

Zits

By Daily Republic Syndicated Content | From Page: A8

 
Blondie

By Daily Republic Syndicated Content | From Page: A8

Wizard of Id

By Daily Republic Syndicated Content | From Page: A8

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: A8

Sally Forth

By Daily Republic Syndicated Content | From Page: A8

 
Peanuts

By Daily Republic Syndicated Content | From Page: A8

Pickles

By Daily Republic Syndicated Content | From Page: A8

 
Baldo

By Daily Republic Syndicated Content | From Page: A8

Dilbert

By Daily Republic Syndicated Content | From Page: A8

 
Baby Blues

By Daily Republic Syndicated Content | From Page: A8

Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

 
Frank and Ernest

By Daily Republic Syndicated Content | From Page: A8

Bridge

By Daily Republic Syndicated Content | From Page: A9

 
Word Sleuth

By Daily Republic Syndicated Content | From Page: A9

Sudoku

By Daily Republic Syndicated Content | From Page: A9

 
Cryptoquote

By Daily Republic Syndicated Content | From Page: A9

Crossword

By Daily Republic Syndicated Content | From Page: A9