Saturday, February 06, 2010


A crack-pot idea

The State of California and also the City of Los Angeles are both having budget crises. That is, the cost of providing all the services of government is greater than the revenue received in taxes. For a while it was possible to believe that these deficits were temporary and that in a year or two everything would be all right again. When people thought that way, it was p0ssible for the State and the City to take out short-term loans to cover expenses.

But today our government officials are beginning to realize that these deficits are not simply temporary problems associated with the recession. They are permanent, structural deficits. They were put there by actions of the people at the ballot box. The public was convinced some time ago that government wasted a great deal of the money it collected in taxes. The public voted to place severe restrictions on the ability of the State and of the City to increase revenue by increasing taxes. In the case of the State, the restriction is applied to the legislature. A 2/3 vote is required in each house for a tax increase or for enacting a budget. In the case of the City (or county or other local government) a 2/3 vote of the public is needed for a general tax increase.

These restrictions were cleverly inserted in a popular initiative designed to permit retired people to remain in their homes in spite of the large escalation in the cost of houses and the consequent increase in the real estate tax. In spite of warnings about the consequences, the public enthusiastically voted for the tax relief on old mom and old dad. The consequences are here and it's high time to do something about them.

I write about Proposition 13, of course. It was part of the "Tax Revolt" of the 1970's and 1980's. The argument in favor of the tax revolt was that government was too big and the revenue needed to be reduced so that the elected officials would have to run the government on less money and thereby make it smaller. Unfortunately, the public kept electing officials who were not at all in sympathy with the ideology of "smaller government." These officials were concerned with the needs of the people who elected them and tried to find ways to provide and fund services that they demanded, such as better schools, better medical services, better services for the elderly, more and better libraries, more police, more fire protection, etc.

I have a crack-pot idea. These services are needed because the population of the city and state are increasing. Suppose we establish a State lottery with winners and losers. Actually, it wouldn't be a lottery. The way it would work is this: tickets would be sold to all individuals who wished to stay in the State. One could pay as much or as little as he wished for a ticket. A commission would examine the revenue and decide how may people could be serviced with that revenue. A cut-off would be established on the ticket price. If you paid less than the cut-off amount, you would lose your right to stay in the State. In that way the population could be reduced to the amount that could be serviced by the available revenue.

Of course, reducing population would reduce the next year's revenue and a new lottery would be required to reduce the population even more. Etc., etc., etc. In this way the ideal of reducing the State government to virtually nothing, the ideal of Howard Jarvis, would be achieved at the same time as reducing the population of the State to virtually nothing.

Isn't that a great idea?


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