Politicians introduce new deficit plans

January 9, 2008 8:05:03 PM PST
The proposals aimed at dealing with California's $14 billion dollar budget deficit are rolling in.

They include everything from raising your taxes, to hiring more people to collect them.

Despite 15,000 firefighters, 1,600 fire engines and 140 aircraft, what the state learned from last year's fire storms in Southern California is it needs more resources.

It's not a tax, but Governor Schwarzenegger's budget proposal tomorrow will include an extra statewide 1.25-percent fee on all insurance policies covering homes and businesses to boost firefighting capabilities.

By calling it a fee, it's easier to get it approved by the Legislature, requiring only a simple majority.

"What we saw in California last year was our second 100-year fire in the space of four years. The risk we face in California is now substantially different that we've seen before," said Carrol Wills from the Blue Ribbon Fire Task Force.

One Democrat says the Governor's fee is really a tax, and the proposal will likely not get out of his insurance committee because it's unfair to people who live in cities.

"Somebody living in a high-rise in San Francisco, who 's already paying for fire protection, is asked to pay for fire protection on a house that's in the outskirts of Truckee built in the middle of a forest, when land use positions probably says that's an improper place for it," said State Senator Mike Machado (D) Linden.

The state's mounting budget deficit has created a new buzz to raise fees and/or taxes to close the shortfall. Today, the largest state workers union showed off thousands of suggestions from members on how to solve the crisis, including raising taxes.

One wants to boost the alcohol tax; another thinks the sales tax could be raised by 2-percent; while a special tax on luxury cars was submitted.

"You probably need to consider those, just like you need to consider whatever program cuts might be," said SEIU Local 1000 President Jim Hard.

But taxes would need some Republican support to meet the two-thirds requirement for approval, which isn't likely to happen.

"Tax increases hardly ever raise what they're intended to raise. Number one, they always fall short of estimates because it changes behavior. Secondly, it has a depressing impact on the economy," said Assemblyman Roger Niello (R) Sacramento.