Our View: Steinberg has an opportunity
California is at a crossroads. The Golden State could be further tarnished, accelerating decline, or improved by reversing recent trends. It depends in great measure on those now in control.
No one is in a more influential position than Democratic state Senate President Pro Tem Darrell Steinberg. All state senators represent nearly 1 million Californians, but it's perhaps ironic that Steinberg's district includes the Capitol in Sacramento, giving him, in a sense, two constituencies, private and public.
Steinberg noted his role has changed from mere legislator advancing issues dear to his heart, to broader concerns as leader of the upper house, requiring more compromise to bring together disparate interests.
It is noteworthy that the Democrats' new supermajorities in the Senate and Assembly require less compromise than when Republicans held enough seats to block tax increases and other measures requiring two-thirds approval.
That is why it was encouraging to hear Steinberg say Democrats must resist over-reaching. It was less encouraging to hear him say Democrats must resist being too cautious and missing "real opportunities to fix what's wrong."
This, of course, depends on what is viewed as "wrong" with California, and what is viewed as a "fix." Up to now, that has been the crux of the debate, at least when there were enough Republicans to force debate. The Democratic majority too often viewed more government regulation, taxation and spending as fixes, rather than as what's wrong. More medicine like that will kill the patient.
"Government has a role to play in improving the lives of people," Steinberg said. We believe government improves lives best when it interferes least. We await Steinberg's actions to see if he favors prescribing more of what is wrong.
The senator rightly noted the state's abysmal fiscal condition has improved, at least on paper. Annual budget deficits declined from $42 billion in 2009 to $26 billion then $19 billion and most recently to "virtually balanced," he said.
It's significant that Steinberg did not acknowledge that overspending and over-extending government's reach helped create the deficits. It's perhaps more significant that Steinberg regards the projected $1.9 billion shortfall for the current fiscal year to be "virtually balanced."
It also is significant that the current projected deficit is as low as it is only because voters were persuaded in November to approve a $6 billion increase in income taxes on highest earners and in sales taxes on all shoppers. California already had among the nation's highest tax burdens. Now, the top marginal income tax rate has increase 29.13 percent to a staggering 13.3 percent of income, and does not distinguish between ordinary income and capital gains as federal taxes do. Worse, the income tax hit is retroactive to Jan. 1, 2012.
This soak-the-rich approach only dampens economic growth and probably sends taxpayers in search of less-burdensome places to live, including substantially lower housing costs. Unemployment is among the highest in the country, and the state is losing fast-growth companies to places such as Washington, Virginia, Texas and Utah.
We were encouraged, however, when Steinberg said that if the deficit remains in the $1.9 billion range, he will not seek more taxes to fill it, but rather would cut spending. Considering how much he deplored previous cuts that helped close the deficit, we regard that as a good sign.
Some of the senator's ideas we look forward to evaluating. We agree with his desire to reform the California Environmental Quality Act to make it less a tool for punitive lawsuits.