There are 120 legislators and eight elected statewide officials in Sacramento, but maybe the most sensible elected official in California lives much of the time in Washington, D.C.
Or at least the one who’s making the most sensible proposals.
Rep. Devin Nunes, who represents California’s 22nd District in Congress, encouraged Republicans at the party’s state convention to pursue five ideas for revitalizing California: kill the state income tax, move bonds for the chimerical high-speed rail system to water storage, increase offshore drilling, change the way public employee union dues are collected, and convert the Legislature into a single chamber or a part-time governing body.
California has some grubby messes to clean up. This state leads the nation in poverty, its housing market is no market at all, and its tax system does far more harm than good. The roads are a mess but people are using them to move to Texas, Arizona and elsewhere, while politicians throw billions at the bullet-train wreck. California’s dams are about to burst, both metaphorically and literally.
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Meanwhile, we have the ideas of an “outsider” to consider. Let’s look at what each of Nunes’ proposals can achieve.
Eliminating the state income tax. State Controller Betty Yee says the current system is “is outdated, unfair, and unreliable” and “reflects economic patterns and demographics of the past.” Because the state relies heavily on its income tax, revenues are vulnerable to booms and busts.
California’s income tax system has the highest rate, is the least flat, and places the biggest burden on the state’s most productive residents whose investments drive economic performance and create jobs. Former Senator and Budget Chairman Mark Leno told CalWatchdog last year that income tax revenues are “to a certain degree overly dependent on the highest wage earners,” accounting for the volatility. The nonpartisan Tax Foundation ranked California’s income tax system last in its 2017 State Business Tax Climate Index.
A flat tax is better, but maybe a more attractive alternative exists. If a serious debate about replacing the income tax with a consumption tax occurred, many would find that they prefer a consumption tax. It’s less intrusive and volatile than an income tax, and is pro-growth.
Focus on water, starve the high-speed rail. With heavy rains straining our reservoirs and millions of gallons of water being released to sea instead of being saved, California needs additional space to bank water for the many unrainy days ahead. It doesn’t need a bullet train that will be slower, more costly and haul fewer riders than promised.
Increase offshore drilling. Part of the revenues lost from abolishing the state income tax could be replaced by letting energy companies take greater advantage of the oil and gas off the resource-rich California coast. Americans for Tax Reform reckons “investment in oil exploration would bring in $1.124 billion in additional tax revenues annually.” At the same time, economic output would jump by $11.589 billion a year. The California Policy Center’s mid-range estimate says increased offshore development would create nearly 300,000 jobs by 2025.
Changing public employee union dues collections. It’s not state government’s responsibility to collect union dues through paycheck withholdings. That’s the unions’ task. If members had to start writing checks monthly, they might realize that they’re not getting their money’s worth. Maybe then they’d rethink their membership, especially when their dues prop up politicians and policies they don’t support.
When this happened in Wisconsin, membership fell, in some cases sharply. A California with politically weaker public employee unions is a better California.
Altering the Legislature’s structure. This one is too easy. The less time the political class spends in Sacramento, and the fewer its members, the less damage it can do.
Nunes suggests that his proposals be placed on the statewide ballot. This might not be the best strategy. Passing one initiative is difficult and expensive. Passing five is nearly impossible. Ask Arnold Schwarzenegger, whose reform proposals were rejected in 2005, two years after winning election by more than 17 points.
But that doesn’t mean that sensible lawmakers can’t chip away legislatively at these policy targets and that candidates should not support them. With enough exposure, voters will realize that these are practical ideas to move California ahead.
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute. The nonprofit institute advocates for personal responsibility and individual liberty in national and state issues.