One Reporter's Opinion: 'NO' to 56 and 57
George Putnam
Friday, Feb. 20, 2004
It is this reporter's opinion that two proposed propositions facing the voters of the state of California, if approved, could lead the once Golden State to disaster. They are propositions 56 and 57.
Proposition 56 would give a blank check to California's socialistically inclined state Legislature. Currently, the state constitution requires a two-thirds vote in the Legislature before it can increase our state taxes. That two-thirds protection is one of the few safeguards this state has against unjustified tax hikes. It's a protection California voters put into the state constitution with Proposition 13. The two-thirds legislative vote requires bipartisan consensus: checks and balances.
If Proposition 56 passes, the socialist majority in the Legislature will have a much easier way of accomplishing their spending plans. Here are some of the things they have in mind:
Increase car taxes, which were already increased 300 percent last year.
Increase gas taxes (without even using the revenue for transportation).
Add new and higher parcel taxes to homeowner property tax bills.
Increase income taxes and sales taxes (already highest in the nation).
Add tax surcharges on everything from diapers to beer (don't laugh, it was proposed in the last legislative session).
Slap more taxes on small businesses and employers, which will drive more companies out of business and out of state and more people into the unemployment lines.
This is only part of the story. Plainly speaking, to eliminate our two-thirds vote protection would prove disastrous.
As for Proposition 57, as Stanford economist John Shoven puts it: "The $15 billion bailout bond measure is a way to spread the pain over time. It doesn't get rid of the pain."
Sen. Tom McClintock says: "The $15 billion bond would not resolve the long-term imbalance between spending and taxation. The state would have billions of dollars in loans taken from special funds such as state transportation and local governments that would have to be paid back in future years."
If all of the $15 billion were borrowed and paid back, the interest would double the amount borrowed!
Newly elected Gov. Schwarzenegger suggests the repayment be spread over 14 years. But how many governors would have come and gone in that space of time? California State Treasurer Phil Angelides estimated the total cost of the bond at $1,700 per California householder.
When asked to comment on this $15 billion Proposition 57 fiasco, Gov. Schwarzenegger was nowhere to be found. It now comes to light that he was in New York attending a dinner with a host of big-monied New Yorkers and investors who agreed to pay as much as $500,000 to dine with him last Tuesday.
The dinner was served high above Central Park at the residence of Robert Wood Johnson IV, owner of the New York Jets and heir to the Johnson & Johnson pharmaceutical fortune. The purpose of this sumptuous feast, it turns out, was to raise money to campaign for Proposition 57, which California voters oppose by a wide margin.
The money-raising governor had told California voters he does not need any special interest money and stated to a spokesperson he did not intend to accept contributions from any bond dealers directly benefiting from the sale.
But Governor, what about accepting dollars from CEOs of investment banks that employ bond dealers, attorneys for the bond dealers, spouses of bond dealers, investors who buy the bonds, and others with less obvious financial interests?
And don't forget the commercial real estate interests that operate nationwide; they, too, are concerned in California's recovery and dependence on the $15 billion bond measure. One developer has already given $500,000.
And don't overlook the executives from New York-based insurance companies and their investment in bonds.
Whatever became of Arnold's friend and economic adviser Warren Buffett, who suddenly disappeared after he more or less challenged Proposition 13? I wonder if he was in attendance at the $500,000-a-plate dinner.
Now we know why our super-salesman has set aside body building for bond building in New York.
Vote "NO" on 56 and 57 to avoid absolute financial disaster for your children and your children's children. 56 and 57: NO! NO! ... a thousand times NO!
The legendary George Putnam is 89 years young and a veteran of 69 years as a reporter, broadcaster and commentator ... and is still going strong. Click here for George's complete bio.
Editor's note:
Arnold Schwarzenegger 'Terminates' Politics, Get the Story – Click Here Now
