(Editor’s note: We received the following letter from Senator Tom Harman in response to our article of June 24, 2011, see related articles below. In that article, we inserted our own comments in a bracketed box in the middle of his statement. This is something we almost never do because our editorial policy is to present the statements of politicians in whole, without spin, so readers may form their own opinions.

In the June 24 article, we were trying to add a little clarification on two issues. The first issue was to attempt to explain that Republicans, Like Senator Harman, use the words “tax increases” to mean the same things which Governor Brown and the Democrats refer to as “tax extensions.”

These two seemingly contradictory phrases became prominent several months ago when the budget battles were at an earlier stage. When Governor Brown and the Democrats started referring to the Governor’s proposals as “tax extensions”, the taxes at issued had not yet expired. As the months went by, the temporary tax hikes did expire, but Governor Brown did not change his wording.

According to Senator Harman’s letter, by Friday, all of the taxes at issue will have expired. Thus, it now seems that Senator Harman is more correct to refer to the proposed tax changes as increases. It will be interesting to see if Governor Brown changes his wording. This is all very important because public opinion surveys earlier this year indicated the public was much more accepting of extending taxes already in place, then they were to implementing tax increases. Either way, the Governor has taken tax changes off the table for now, so certainly if he continues to push the issue next year, it will be pretty hard to call them tax extensions.

The other issue raised by Senator Harman was our comments about some budget numbers included in his original statement. In this statement he compared spending cut amounts for one year, against tax increases for five years. Of course, using this approach, the amounts are not close to being balanced. In our inserted comment, we suggested that this was not a reasonable comparison because it was sort of an apples/oranges comparison.

In the following letter, Senator Harman explains why he believes this comparison is in fact valid because the Governor’s proposal was for extending, or increasing taxes over five years. The spending cuts, on the other hand, are for less than five years.

The issue here seems to turn on who has control. As long as one party in the state legislature does not have a two thirds majority, and as long as the two parties don’t work together, the only way to change the taxes would be a vote of the people. Thus, Senator Harman appears to consider the tax increases a five year lock in. But, since the majority party in the legislature, currently the Democrats, could eliminate the spending cuts with the next annual budget, the savings should only be counted for one year.)

By State Senator Tom Harman
Simply put, if you are going to clarify someone’s remarks you should be accurate. I read with dismay your mischaracterization of my remarks regarding the budget.

The taxes proposed by the Governor are most definitely tax increases. Should the democrats and the Governor have their way we will all be paying more than we are today … hence the term “increase”

• The Personal Income Tax expired in December 2010. All of us received a little more in our paychecks starting 7 months ago. Should the voters pass the Governor’s plan our personal income taxes will once again go up.
• The Dependent Tax Credit was returned to the pre-2009 higher level in January. The Governor proposes to lower that figure back to $98 per dependent. Currently it is over $300.
• The sales tax and Vehicle License Fee passed in 2009 by the legislature are set to expire Friday, July 1. The Board of Equalization issued a statement saying retailers have already made the technical adjustments necessary to collect the lower sales tax starting July 1.
As to questioning my numbers on the Governor’s proposal:

• The roughly $10 billion in spending reductions do not “continue on just like the taxes” as you state. Many of them are short term solutions that would continue for a year or maybe two. Even today [June 27, 2011] in the Governor’s press conference he acknowledged this fact. However, the tax increases supported by the Governor and the democrats are for a full 5 years.
• If past is prologue, taxpayers can be sure the democrats will eliminate spending reductions as the economy improves, yet there will be no effort to remove or cancel the tax increase. Case in point, state revenues were unexpectedly $6.6 billion dollars higher in May than anticipated by the Governor in January. He promptly cancelled some of the planned spending reductions in his May Revision.
Under the Governor’s plan government grows by about 27 percent over the next three years. State revenues are expected to be $7.4 billion higher than anticipated (an even higher figure than the $6.6 billion reflected in the May Revision). The Governor and democrats have made no accommodations for that revenue windfall other than to spend it…. Where is the austerity in that?