Cali - While screaming about taxes, consider a few other issues

While screaming about taxes, consider a few other issues

Many readers blame illegal immigrants for California's fiscal mess. But an analyst says the state's woes have more to do with high medical costs for the elderly and an outdated property tax system.

Steve Lopez
March 27, 2011

I've been getting a lot of mail lately telling me what a world-class moron I am.
Fixing California's budget mess is simple, the argument goes, and only a dope like me would have trouble seeing the obvious.
Eliminate sloth and waste. End public employee pensions. Deport illegals.
Problem solved; hoooray for California!
As someone who has spent more than 30 years writing about sloth and waste, I can guarantee you there's still more of both out there. But not $26-billion worth, which is what's needed to close the gap for the next fiscal year.
Public employee pensions? Yeah, they have to be reeled in because that's an essential part of the budget fix, and I've said so on many occasions. But that doesn't begin to square the books.
Let me move on now to the all-purpose California budget fix endorsed by many of my correspondents:
Round up the illegals and load them onto the Tijuana Express.
"What is it with you wetbacks," reader Jonnie Bangkok said in an email to me, "that you can't understand NO NEW TAXES, TAX EXTENSIONS, OR TAX INCREASES. Not now. Not ever. No services for illegals!!! HEADS ON A STICK!"
James Q. Sullivan dropped me a line to say:
"We wouldn't have to save the state if we weren't supporting millions of worthless Latinos."
Should I respond to people like this, I've always wondered? If so, how?
Dear Jonnie and James:
As it happens, I was sitting here thinking to myself, hey, I haven't heard from an idiot in at least five minutes. Nice of you to write. I'm eating a chimichanga right now, but after a siesta, I think I'll call some other wetbacks and see if anyone wants to put their head on a stick, just for something to do. Take care.
Not all my critics are redneck ignoramuses, to be fair. Lots of reasonable people are unhappy about Gov. Jerry Brown's proposal to erase a $26-billion deficit half with cuts and half by extending tax increases, and I'm not thrilled about it myself.
We're not talking about peanuts. The average hit for those taxes is $260 per person each year, or $1,040 for a family of four. But what's the cost of not extending them?
It would be huge, and it's not just liberals who are saying so. After looking at what the effect would be on education, healthcare and public safety, the Los Angeles Area Chamber of Commerce has endorsed the extension as long as the deal includes future spending caps and pension reform.
California is, in fact, a relatively high-tax state, though not the highest. In 2009, the combined state and local tax burden was 10.6% of personal income, as opposed to the 9.8% national average. As my colleague George Skelton pointed out earlier this month, state general fund spending has dropped by billions in recent years, with next year's spending per $100 of personal income projected to be the lowest since Ronald Reagan was governor.
Are you still reading, Jonnie and James? I hope so, because if you think you hate me now, let me give you a little more to work with.
"Do people really think illegal aliens are a primary source of our problems here?" asked an incredulous Chris Thornberg of Beacon Economics.
On healthcare, he said, "The problem is not quote unquote wetback kids, it's grandma." Thornberg explained that given the huge cost of elder care, which Medi-Cal foots some of the bill for, the price of a hip replacement could cover the medical needs of dozens of children.
To be fair, it costs billions to provide services to illegal immigrants living in California and the U.S., and I've spilled lots of ink advocating immigration reform. But what would it cost to chase, apprehend and deport illegal immigrants, and what effect would that have on the economy in the long term?
"That illegal kid isn't an expense, he's an investment," said Thornberg, who attributes European pension disasters in part to population declines.
"If you expect to have Medicare and Social Security when you get to that age, you need to grow the income base. You need earners out there.... Every 13-year-old illegal immigrant kid should have the right to go to a good K-12 school, and then a good college, and then to graduate and medical school, so he can become a doctor and we can tax the living hell out of him."
A lot of working people are genuinely struggling, Thornberg said, with good reason to vent. But others are all about "me, me, me, me," here in the most privileged society in the history of the world, busily buying "crap" they don't need while crying about taxes.
Now that we've got everyone's attention, I'd like to suggest that as middle-class taxpayers get squeezed, they should spend at least as much time screaming about the staggering concentration of wealth as they do about carrying the load for the working poor.
Thornberg is neither for nor against extending the tax increases, by the way. To him, they're beside the point. If he were king for a day, we wouldn't pay higher taxes overall, but there'd be a more equitable distribution of the burden, with greater emphasis on property taxes.
That's right. He'd do the politically unspeakable and blow up Proposition 13.
People who've been in their houses for 35 years, with annual property taxes of $800, "are not paying their end of the deal," said Thornberg. He'd align property taxes with market value, and go after "the guys who've been in towers for 30 years in downtown Los Angeles" but are paying chump change in property taxes, thanks to Prop. 13.
If you'd like to weigh in, please do so quickly, before I'm deported.
steve.lopez@latimes.com