Angelides' numbers don't add up. . .

Former California Finance Director Tom Campbell has several observations on the Angelides "tax and budget plan." Here are some of the notable excerpts -

The first observation is that Mr. Angelides' budget would lower the state's financial reserve. It would decrease the state's carry-over balance from $1.63 billion to $500 million. The state constitution requires a budget stabilization account in addition to the carry-over balance. Mr. Angelides has combined the two. His budget would leave California vulnerable to unforeseen budget events by raiding the state's rainy-day fund, which was created just this year through Gov. Schwarzenegger's responsible fiscal policies.

This leads to a second issue ~ using one-time money for ongoing purposes. In lowering the state's financial reserve by more than $1 billion, the Angelides tax plan spends the money not on one-time projects but on on-going programs. This is fiscally very dangerous. ...

The third issue is that the budget relies on money from nowhere ~ $1.15 billion from vague "efficiencies and government reforms." During the Democratic primary, Mr. Angelides ridiculed Controller Steve Westly's similar proposal as "gimmicks" and "fairy dust." Now, Mr. Angelides is employing the very same tool. And while the figure is oddly specific ... Mr. Angelides fails to identify a single inefficiency he would target. The document also lists $2 billion from the closure of "corporate tax loopholes," but Mr. Angelides yet again fails to specify those "loopholes" and how much increased revenue he projects from each. He has only promised to appoint a commission to be in charge of identifying such loopholes. Interestingly, this number has come down from the Democratic primary, during which Mr. Angelides said these so-called loophole closures would yield $2.5 billion.

If California is to spend more for new projects, specific sources of money need to be identified. We cannot just rely on vague "efficiencies and reforms." That's what you say when you don't have a plan.

A final point to make is that raising taxes will hurt economic growth. Coming out of the last recession in California, major economic studies identified high taxes in California as a reason jobs fled to other states. Already, California's corporate tax rates are among the highest in the nation.

The conditions that led to jobs fleeing California in the last downturn have largely been remedied under Gov. Schwarzenegger; but they can and will come back if businesses with jobs go to other states because California decides to take tax levels higher.