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Sacramento must change its ways
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If state legislators need an example of financial discipline, they should look to cities like Ceres which have been scrambling - with gut wrenching actions - to balance their budgets over the past several years.

Never easy, it was slash, slash, slash.

The council has eliminated 19 positions, cut expenses, dipped a bit into reserves and has a balanced budget today. That's what any responsible overseers would have done.

It's just like when Californians must downsize when their income drops. They cut expenses. They buy hamburger instead of T-bone. They sell the SUV and ride around in an economy car. Drop the cell phone.

While state lawmakers did trim spending and pass a budget on time, they didn't slash deep enough. Nor did they reform the state's pension program. Instead, they delayed billions in school payments and extended part of the sales tax increase set to expire this month and hiked DMV fees by $12. They added another key tax to an already over-taxed state.

State government simply has to change its ways. We can't afford the things we once could.

Has anyone actually explained why it wasn't a good idea to sell off the assets the state can't afford to run? Instead of crying they have no money to run parks like Columbia State Historic Park or Railtown 1897, why don't they sell off those assets to private enterprises which can operate them at a profit and perhaps improve them?

Why should the state own the 77-acre Cow Palace built in Daly City in 1941? The development group Pro Sports Venture Capital LLC, wants to buy the site which is underutilized.

In 2009 the governor proposed selling the L.A. Coliseum, San Quentin State Prison - which sits on a stunning Marin County waterfront property - and the Orange County Fairgrounds. The move could raise up to $1 billion. The ex-governor's plan noted that the state owns "thousands of buildings and land parcels ... that represent billions of dollars of equity."

Republican state legislators - like then state Sen. George Runner - backed the plan while Democrats like Roderick Wright (D-Inglewood) balked. You also have opposition from local officials in those areas, such as L.A. County Supervisor Zev Yaroslavsky who suggested that selling the L.A. Coliseum was absurd as selling "the Statue of Liberty or the Washington Monument." Hardly a comparison.

Californians work 104 days out of 365 just to satisfy their tax debt. No wonder Nevada is gaining in popularity where 43 days are spent toward tax burden and in Texas where that number is 32. Utah 15. Is it any wonder that Utah has a 72.5 percent homeownership rate compared to California's 56 percent? Maybe less taxes and more disposable income to buy things like houses and cars which also puts people to work?

Are you also aware that California:

• has the highest sales tax rate and the highest state tax and fees on gas (47.7 cents per gallon) in the nation?

• led the nation in borrowing the most money from Uncle Sam for unemployment insurance shortfall ($10.6 billion since January 2009)?

• led the nation in home foreclosures?

• was listed as the 48th business friendliest state to small business, which means we're the second unfriendliness to small business according to the Small Business & Entrepreneurship Council's "Small Business Survival Index"? The top five states considered friendliest to small businesses are (in order): South Dakota, Nevada, Texas, Wyoming and Washington.

• is fifth in the nation in prison spending per capita? Correctional spending in California is $244.56 per capita. Maybe we can pay Utah to take care of our prisoners since they do it for $120.74 per capita. Try getting the prison guards' union to sign onto that one.

• had 20 percent of its residents without health insurance? Utah, by contrast has 14 percent.

• leads the country for welfare recipients as a percentage of the population? Try 3.8 percent as opposed to 0.46 percent in Texas or 0.67 percent in Utah.

It's all related. Higher taxes, a business unfriendly environment, overspending by the state and excessive regulation send wealth and prosperity to states which have lower taxes and less regulation.

Legislators came up with a hare-brained scheme in the last budget session to add more taxes, namely the Amazon tax. They decided to have large out-of-state retailers to collect sales taxes on purchases that their California customers make on the Internet.

A 1992 U.S. Supreme Court ruling determined that sellers can't be forced to collect sales taxes unless they have a brick and mortar presence in that state. Brown and his cohorts approved a statute that establishes presence in the state as when sellers pay commissions to other Internet sites in California, known as affiliates, which refer buyers; or when sellers have a related company operating in the state.

Gov. Brown, who harped for months about the need to have a statewide election for the continuance of the temporary 1 percent sales tax increase and was fought by Republicans, thought the so-called Amazon tax was a "common-sense idea" to raise an estimated $317 million a year. Really. Think again, Jerry.

To quote Ronald Reagan, "there you go again" Sacramento.

Brown doesn't believe in a truism that whenever you tax an activity, you reduce that activity. If you want sales to go down and those lose tax revenue, keep taxing higher and higher. This latest ploy will drive more people out of California and the state will end up losing more tax revenue. Rhode Island and North Carolina report their online sales tax laws have brought in no new revenues.

Amazon and Inc. told thousands of California Internet marketing affiliates that they will stop paying commissions for referrals of so-called click-through customers because the new law applies only to online sellers based out of state that have some connection to California, such as workers, warehouses or offices here. Affiliates would have to move to another state if they wanted to continue earning commissions for referring customers. That affects Lab126 Inc. in Cupertino, which develops Kindle electronic book readers, and Ken Rockwell, a San Diego owner of a photography website. Rockwell is headed to Las Vegas, Scottsdale or Ensenada.

Many of the 25,000 affiliates in California - especially larger ones with dozens of employees - are likely to leave California, said Rebecca Madigan, executive director of Performance Marketing Association. When Illinois passed a similar law, all the major players in the industry moved out of state. She says goodbye to the $152 million in state income taxes last year those affiliates paid.

Board of Equalization vice chairman Michelle Steel agrees that "it will create no new revenue but instead cost the state lost income taxes from lost jobs and expensive legal fees from drawn out litigation."

A similar Amazon law is being challenged in New York and a court struck down Colorado's online sales tax law.

Harry Hopkins, an adviser to FDR, was once quoted as saying, "Tax, tax, tax, spend, spend, spend. The people are too dumb to know the difference." Apparently the progressives in Sacramento would agree with him.

Voters must educate themselves on the tax ideology of candidates and flee from them in droves. Had they done so last November, we would have a business-friendly governor in Meg Whitman instead of the tax-and-spend governor we have in Jerry Brown, bought and paid for with union money.

How do you feel? Let Jeff by e-mailing him at