13 years ago voters approved a seven-year increase in the top income tax rate. Sold as an education measure, the real reason was to cover up a tripling in annual school pension costs:
That explosion in pension costs became inevitable after the State Teachers’ Retirement System (STRS) rejected my proposal seven years earlier to raise pension contributions at that time to avoid bigger costs down the road. Addicted to the new revenues, public employee unions sponsored a ballot measure in 2016 to extend the temporary tax increase until 2030. Since then, annual state spending on salaries and benefits has risen 85 percent to more than $50 billion per year and lawmakers have drained the General Fund of an extra $20 billion to reduce unfunded pension liabilities never approved by voters.
Now they are at it again. Earlier this week, a budget advisor to the Assembly Speaker issued a none-too-subtle admonition to get cracking on renewing the temporary tax increase. But under no circumstances should the tax increase be renewed absent major reforms to employee staffing, compensation and benefits. For too long California’s governments have been run for the benefit of government employees. We must elect a governor in 2026 who is unafraid to take them on and prepare to defeat a ballot measure to extend the temporary tax unless accompanied by major reforms.
