Schwarzenegger's Folly

Schwarzenegger’s Folly, House Chamber, Washington, D.C., January 12, 2010. Mr. Speaker:

California’s governor is seeking billions of dollars of additional federal aid to fill his ever-widening budget deficits.

Last April, he imposed the biggest tax increase by any state in American history, despite repeated warnings of the damage it would do to the state’s economy. California already had the highest sales and income taxes in the nation – he increased both.

The taxes were supposed to produce $13 billion in additional revenue. But after nine months, California’s sales tax collections are down $270 million; income tax collections are down $10 billion. The only major tax not raised – the corporate tax -- is the only tax that’s producing more revenue – up about $2.4 billion in the same period.

I have a modest suggestion for Gov. Schwarzenegger: rescind the tax increase that has crushed California’s economy and its revenues.

And to my House colleagues: let’s not repeat Gov. Schwarzenegger’s folly nationally.