California Insider

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Sacramento Bee Columnist Daniel Weintraub

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August 19, 2003

Cruz proposes tax increase, health care mandate

Cruz Bustamante has produced a bold but politically risky proposal that he says would close the state’s budget gap while increasing spending on the schools and reducing the car tax for people whose vehicles are worth less than $20,000. The plan would raise taxes by $8 billion on the wealthy, business owners, commercial property, and on the users of cigarettes and alcohol. Bustamante said his proposal would cut $4.5 billion in spending, but $2 billion of that represents a shift in health care costs for the working poor from the general taxpayers to employers. His plan also projects savings of $500 million by fighting Medi-Cal fraud and $2 billion in unspecified cuts. If elected governor, Bustamante said, he would call a special session of the Legislature and introduce his plan. If it was rejected, he would gather signatures for a ballot measure and call a special election to put it to a vote of the people.

This is how strange the recall has become. The movement began with a small band of anti-tax conservatives. Now Bustamante is trying to harness the energy they unleashed to win support for what would be the biggest tax increase in state history.

Standing outside his suburban Sacramento home, Bustamante said his proposal represented the “tough love” needed to pull California out of its fiscal tailspin.

“The simple truth is that we all got into this mess together,” Bustamante said. “And we’re all going to have to get out the same way – together.”

But his plan’s details didn’t really call for togetherness so much as class warfare wrapped in a cloak of shared sacrifice. He wants to raise taxes on the wealthy, on business owners, on employers, while rolling back community college fees and car taxes on the owners of low-priced and modest vehicles.

And while Bustamante sought to downplay the difficulty of obtaining $2 billion in additional budget cuts from a Democratic Legislature, lawmakers this summer were deadlocked for weeks over spending cuts that totaled half that much. His savings in Medi-Cal and the $2 billion he says the state would save by shifting health care costs to employers are also problematic. So chances are his plan, even if approved, would still leave a significant gap in the budget.

On the other hand, you have to give Cruz points for guts. His proposal is far-reaching and seeks to consolidate and advance the agenda of the Democratic left at a time when most in that camp feel as if they are under a partisan assault that threatens everything in which they believe. Yet he managed to offer this agenda in a tone that was not combative. He’s offering his plan with rhetoric of inclusiveness and “working together.” If you didn’t know about the holes in it or realize its true scope, it might even leave you feeling warm and fuzzy.