(PR) Open Letter to California Republican Legislators

March 29 2011

Dear Republican Legislators:

Re: Expiration of the 2009 Tax Increases; Restoring California

The undersigned taxpayer leaders are writing to reiterate our position that the 2009 tax increases hurt California; why they should be allowed to expire; and why trading tax increases for various reforms is bad policy.

Although we have heard that negotiations with legislative leaders are at an impasse our concerns remain especially acute because of the potential that individual legislators may break from leadership and support the tax increases. We wish to remind you that a “deal” for the sake of a “deal” ‰ÛÒ any deal ‰ÛÒ would be horribly injurious to the economic health of California.

First although some of the policy objectives we all desire including government employee pension reform and a strict spending limit are good we urge you to recognize that any trade-off between providing the votes to place the largest tax increase in California history on the ballot in exchange for structural and fiscal reforms – no matter how good – breaks faith with the taxpayers and voters of California.

The most obvious reason to terminate these taxes (the "temporary" income tax surcharge has already expired) is that by effectively reducing tax rates you help to create an environment to better stimulate private sector job creation. Conversely nothing could be more harmful to our state’s economic recovery than maintaining our almost-highest-in-the nation tax rates.

This week we read that even New York with its Democrat Governor Andrew Cuomo has opted to resolve its budget problems through reforms and without tax increases. Texas which has a larger budget gap than California as a percentage of its total spending has wisely opted to eschew tax increases and is using the current crisis as an opportunity to structurally reform state government. Notably Texas is pursuing this strategy and not tapping into its substantial $9 billion reserve.

We urge you to stand with California taxpayers who are suffering greatly during this recession and stop discussions centered on placing a massive tax increase before voters. By standing together pro-taxpayer legislators can ensure that these ruinous "temporary" taxes will no longer burden California taxpayers and the state’s economy can begin its recovery.