The spending lobby in Sacramento is beating the drums for higher taxes as the governor and Legislature consider a $15 billion to $17 billion budget deficit and all the strategies to deal with the problem.

Tax increases are job-killers and remarkably shortsighted  in the current economic cycle, which the UCLA Anderson Forecast projects will be a slow, anemic recovery in California. Public employee unions and other advocates of increased public spending may not be working in their own best interests by urging new taxes, when creation of private-sector jobs is the surest way to increase tax revenue.

The tax-increase strategy fails to recognize the following:

California history demonstrates with clarity that an improving economy is the biggest revenue opportunity for the Legislature and governor. When the economy improves, tax revenues surge. Jobs, profitability of California companies, and economic investment translate into windfall tax revenue to the state’s general fund and to city and county treasuries. This is not a mystery; it happens again and again.

The question is whether the Legislature and the governor will encourage an accelerated economic recovery or slow it down with job-killer bills. The Legislature obviously needs to work to make California more competitive for investment, not stifling economic growth by raising taxes. Increasing taxes during an economic downturn is one of the most damaging actions that can be taken, placing an additional drag on the economy. Tax and fee increases, whether state or local, will only retard economic recovery. A tax-increase response to this state’s budget problem is a serious error.

What the public understands beyond state Capitol corridors is that tax increases make California a more expensive place to live, work, and operate businesses.  Extended discussion of tax increase proposals in Sacramento sends a damaging signal to those we should be encouraging to invest in California.

Another bit of reality outside Sacramento, demonstrated again and again by opinion polls, is that Californians do not want a tax-increase response to the budget problem. The public is asking elected officials to manage state finances. It is no secret that waste and inefficiency are marbled throughout state and local government. The public wants to see hard-earned tax dollars spent more cost effectively. Policy-makers can go a long way toward covering the current budget deficit if they decide to identify and root out low-priority, ineffective, and excessively bureaucratic waste. What the public understands is that higher taxes do not protect essential services; higher taxes only insulate low- priority, wasteful and ineffective spending. These appropriations must be reviewed.

To make matters worse, some of the tax-hike schemes being discussed by the spending lobby, such as higher income tax brackets, have been tried before. Those increases have been an embarrassment for policy-makers, reversed by courts, voters, and the Legislature itself.

There are some examples of backfiring taxes enacted in the early 1990s to deal with a budget deficit:

Smog Impact Fees. The $300 tax for registering vehicles brought in from other states were ruled unconstitutional. After being collected for about a decade, the courts halted the tax, and a $500-million refund process has had adverse and costly side effects as lawyers continue to haggle over exorbitant fees.

Snack Food Taxes. Applying the sales tax on candy and snacks triggered a consumer backlash – until it was rescinded.

Income Taxes. A temporary increase in the highest personal income tax rates, similar to that currently proposed by Senate President Pro Tem John Burton, was enacted a decade ago. It didn’t result in the revenue bonanza that proponents expected. Currently, more than 70 percent of California personal income tax revenue comes from taxpayers who would pay this punitive tax. Chasing even a handful of these California entrepreneurs across the border to Nevada, Arizona, or to other states will have a dramatic impact on state revenues. We do not want these Californians to start voting with their feet.

Maritime Bunker Fuel.  Another “we-told-you-so” example of government killing the chicken that lays the golden egg is that of imposing taxes on sales of bunker fuel – the fuel that ships buy in California, but use when they are in international waters. This tax did not raise revenues. It reduced them, because ships took on fuel in non-California ports. The Legislature responded to ensuing outrage by repealing the tax.

The governor and the Legislature need to exercise great caution regarding any job-killing tax-increase proposals that may be considered.

Californians have a state and local tax bill of more than $130 billion (not including tax payments to the federal government). Californians pay enough taxes to pay for quality schools, transportation, public safety, and social programs. The obvious problem is failure to meet priority needs within a budget of adequate resources.