The Man Who Destroyed California

by digby

Perlstein is deep into researching the 1970s these days and sent me this perfect little tidbit from TIME Magazine May 7, 1973:

During his two terms as Governor of California, Ronald Reagan has never quite lived up to his billing of “Mr. Conservative.” A Democratic-controlled legislature has forced him to compromise. Though he has pared welfare rolls and held down property taxes, he has had to raise income taxes. Since he took office, the state budget has doubled, reaching $9.3 billion for fiscal 1974. But to wind up his governorship with a conservative flourish, Reagan has concocted a scheme that would put a constitutional limit on the percentage of personal income tax that Californians must pay to the state.

His plan would take away much of the legislature’s power to tax. The personal income tax rate would be set at a probable maximum of 8.75%—the average rate that people in the state now pay. Then there would be a rollback: Each year the rate would drop one-tenth of 1% until a ceiling of 7.5% was reached in 1989. That ceiling could be raised only by a two-thirds vote of both houses of the legislature, with the concurrence of the Governor and the approval of the voters at the next election. Reagan estimates that if income taxes increase at their present rate, state revenues will amount to $47 billion in 15 years. Under his plan, revenues would be $27 billion in 15 years, a substantial enough increase, he feels, to meet state needs.

The Governor first took his proposal to the legislature, where it needed a two-thirds vote in both houses to be put on the ballot in November. The bill ran into opposition from Democrats and bogged down in committee. Prepared for that rebuff, Reagan took his proposal to the public. He started a campaign to round up some 521,000 signatures needed to put the proposition on the ballot. To make the plan more palatable, he combined it with a 20% income tax credit designed to refund to the taxpayers $415 million of this fiscal year’s $850 million budget surplus. A citizens’ group called Californians for Lower Taxes sprang up on command. On its first mailing of 120,000 letters, the group received 11,130 contributions, amounting to $140,000. So popular is the scheme that liberal Democrats are reluctant to attack it. As Reagan says with a smile: “If you’re for it, you’ve got a lot going for you. It’s like shooting fish in a barrel.”

Reagan, in fact, has bigger fish to fry. Before his second term expires in 1974, he plans to “hit the mashed potato circuit” and make speeches around the country supporting his plan. “There’s missionary work to be done out there,” he explains. Beyond that, he still wants to be President. He doubtless believes he will be running on the kind of platform that others cannot match: who likes taxes?

In other news, the administration has decided that they just can’t help California. After all, if you start handing out government money to one state, you’ll have to give it to all of them. And they don’t have it. They’ve given it all to the banks and Wall Street fat cats. (And there are promises to wealthy European banks that must be met.) It’s a damned shame.

And down in the seventh circle of hell, Reagan is certainly smiling today. His “missionary” work is paying off in spades.

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