[replicaypu]

This was the issue that actually triggered the recall election that forced Gray Davis out of power and installed Schwarzenegger. Schwarzenegger took an active role in hacking away more of the state's revenues through his time in office, getting us to a place where we now know that taxes need to increase to run the programs we expect from the state.

Simple as that: if we want to staff our parks, we need to pay for it. Staff our schools, pay for it. Staff any of a hundred other programs that keep the lights on and the phone answered when we need someone on the other end of line to be there, pay for it.

LA Times:http://www.latimes.com/news/local/la...2345371.column

In the Model T days, California cars were assessed by counties as personal property. But there were wide variations in each county's assessments. So the Legislature in 1935 adopted a uniform statewide rate of 1.75% and renamed the tax the vehicle license fee. The state collected it, but much of the revenue remained with cities and counties.

In 1948, the rate was raised to 2%, where it remained for the next 50 years with hardly anyone squawking. With the economy booming, Gov. Gray Davis and the Legislature lowered the rate further to 1.3% in 2000, and all the way down to 0.65% in 2001. But when the economy boomeranged in 2003, Davis — using a legally suspect "trigger" provision — raised the tax on his own back up to 2%.

"Outrageous," shouted Schwarzenegger of Davis' car tax hike as he campaigned full-throttle to recall the governor. In one stunt, he used a wrecking ball to smash an old jalopy that symbolized the tax.

Schwarzenegger's first act as governor in late 2003 was to knock the tax back down to 0.65%. It was probably his biggest financial mistake, certainly one from which the state never has recovered.

Problem was, virtually all the vehicle license revenue went to local governments. The state had been reimbursing them — "backfilling" in Sacramento jargon — for their losses after the rate had sunk below 2%. Schwarzenegger insisted on continuing to backfill even though the state was going broke. His tax cut actually went on the books as a spending increase.

Schwarzenegger's solution: Put it on the credit card. The state's still trying to pay it off.

The largess for local government was costing $4 billion annually then. Now, it's up to $6 billion — roughly the size of the state's on-going "structural" deficit.