April 23, 2008

Zaremberg on the tax issue

Allan Zaremberg, president and CEO of the California Chamber of Commerce, offered a cautious response to an article authored by his organization’s think tank suggesting that temporary tax increases may be part of a global state budget solution.

“The magnitude of the budget situation will dictate the solution,” Zaremberg said in an e-mail statement late Tuesday. “Until the May revise, we won’t know the extent of the crisis we face.”

Loren Kaye, president of the California Foundation for Commerce and Education, suggested that while California has a spending problem, the state couldn’t solve the deficit problem without “devastating important education, public safety and safety net programs.”

Responding to the governor’s shifting rhetoric on taxes, Kaye said a budget solution involving taxes should be temporary and must be accompanied by budget reform.

“Mr. Kaye’s column was about the unintended consequences of tax increases,” Zaremberg said. “His prescriptions for policy and program reforms would ensure that the state would avoid serious cuts or tax increases in the future.”

Meanwhile, Republicans continue to resist any talk of taxes.

“I continue to disagree that taxes should be a solution for us because even with reform, it isn’t fair to look to the taxpayers,” said Assemblyman Roger Niello, vice chair of the budget committee. “The primary reason we’re considering this is because the economy is weak and raising taxes in a declining economy is the worst thing government can do.”

Posted by Judy Lin on April 23, 2008 11:40 AM