What has happened to the California Dream? We are no longer the beacon of creativity and open-road freedom. The California Dream is a hollow promise with just a slight glimmer of its past glory.
We have schools where teachers have to teach in two languages, road conditions that rival Philadelphia’s famed potholes, a health-care system that is burdened with absurd demands from special-interest groups and illegal alien universal care, our balkinized communities are riddled with gangs, and environmental special interests have created a situation that has rendered profitable resource development and significant California revenue impossible. Economic competitiveness is nil, the primary tax-revenue sources are fleeing the state in droves and overall quality of life is sub-par compared to most of the nation. Yet, the only answer out of our political class — and their supporters — is more of the same.
The widely respected Pew Research Center looked at our fiscal performance and gave California an overall grade of D-plus. Most Americans consider California to be the one model all should avoid.
So, what are the solutions?
The solutions are just plain common sense. If you continue to look at the situation through your right or left political mind-set, then none of the proposals will ever make it to the street. Failure to do so dooms California to a continuing boom-and-bust economy, eternal gridlock in Sacramento, the never-ending cycle of tax and spend, a junk bond rating and the eventual bankruptcy of the state.
Here are my suggestions.
First, there is no solution to California’s revolving budget crisis other than repealing California’s repressive tax codes. They are structured so poorly that the state suffers innumerable boom-and-bust periods, creating revenue streams that result in big government through increased spending during the good times and skyrocketing tax rates during bad times.
If we ever want to stop this absurd cycle, we must abolish the current tax codes. Spending limits will not work. The best form of control is not to give Sacramento money during boom periods and don’t deprive essential programs during bust periods. Starve the cancer first, then the treatment can begin.
Solution: Every state tax must be abolished; sin taxes would be exempt. In their place a single-set tax would be placed on commercial net profit. No deductions allowed.
An individual’s tax rate would be based on his or her total income minus deductions for mortgage interest or rent and charitable contributions. No matter what income level, no income would be exempt from taxation.
Local governments would still have limited taxing authority, but the proceeds would belong to that local government. The state would be banned from borrowing or seizing any of these funds, including local transportation funds. Those taxes would be deducted from an individual’s personal income for the state tax and deductible from federal taxes.
Now imagine the result. We would become incredibly competitive with any state in the union. Tax revenues would vary because of income, but the urge for legislators to spend like drunken sailors would disappear. Businesses would stop fleeing the state, personal income levels would rise and basic government programs would still be funded.
Secondly, we can all agree that illegal immigration is an obvious and divisive issue. It has been incredibly destructive to our state economy, our schools and our health-care infrastructure, and it corrupts our political institutions. Whether you like it or not, we will have to solve it. And whether you like it or not, the solution is not unequivocal amnesty or an open border. So what do we do?
Keep in mind that the traditional migratory relationship between California and Mexico has been in existence for centuries. Today, the amount of money Mexico receives from its citizens in the United States is staggering and has a significant impact on the overall Mexican economy.
I propose that the state of California and the government of Mexico enter into a unique and revolutionary business arrangement. First, we initiate a Mexico/state of California coordinated guest worker initiative along the lines of the Bracero Program, but with the protections that are necessary to protect the workers. Guest workers would have defined rights, services and benefits — all underwritten by Mexico and the employers.
Employers would be required to use eVerify when hiring. If you don’t have a guest worker permit or you’re not verifiable on eVerify, no job. Employers also would be required to pay guest workers the prevailing wage rates or mandated minimum wage, and retain taxes. Workers’ compensation fees would be allocated to the insurance pool described below. Guest workers would be treated as employees without the privileges of citizenship. It’s insane that state and local services are provided regardless of citizenship status. That needs to stop.
If an employer doesn’t adhere to the requirements, they would be fined or legally prosecuted — with the strong threat of losing their business license.
Since hospitals are required under the Hill-Burton Act to treat anyone who walks in, a catastrophic insurance pool would be funded by Mexico. Only guest workers would be able to participate. Plus, the Mexican government would underwrite demographically placed medical clinics that would provide basic care for those citizens under the worker program. Emergency care would be covered by the catastrophic insurance pool.
But some would still refuse to participate. So, if an illegal resident (not guest worker) commits a crime, he or she would be immediately incarcerated without bail, and processed to a court staffed by an administrative justice for a hearing. If found guilty, the person would be sentenced, remanded, imprisoned for the duration of the sentence and then deported to his or her country of origin after completion of the sentence or if paroled. With a significant portion of our state budget going to house illegal criminals, we would immediately remand those illegals found not guilty by the administrative judge directly to U.S. Immigration and Customs Enforcement.
First off, neither a guest worker nor an illegal would have access to any U.S. citizen benefits. That means no financial assistance, no free medical benefits, no driver’s license. Fraudulent identification would cause immediate detention and expedited deportation.
State and local employees would be required to verify proper identification for any service or law enforcement issue. Auto accidents are a prime example. If there’s an accident, the responding officers would normally verify all forms of identification. If it’s determined that any one of the victims is illegal, the vehicle would be immediately impounded for auction and the individual arrested and turned over to ICE. Injuries would be handled under normal procedures but also would lead to detention and deportation. All work-permit holders would be required to carry auto insurance. Failure to do so would result in the revocation of the work permit and deportation.
Mexico has a tremendous financial stake in making sure its citizens are treated with fairness. It also has a responsibility to us to offset our financial burden — that up until now it has refused to acknowledge. It has had a free ride and surely would want to continue to send its problems up north to relieve its internal economic pressures. This approach would help solve this.
Thirdly, all state and local governments need to initiate immediate pay, benefit and hiring freezes. Then, through attrition and layoffs, 40 percent of all state and local employees would need to be released within one year. This would not include law enforcement, fire department personnel and actual teachers. The attrition would come from the administrative side of the house.
Finally, all pension and salary plans would be frozen. They would be frozen until such time as inflation, or the cost of living, makes them on par with the private sector. They would never be allowed to exceed comparable private-sector jobs. There is absolutely no excuse for a government employee to be making more than a comparable private-sector job. What is in place now is unsustainable.
The goal would be to make state and local governments responsive to our needs, able to listen and strong enough to handle real problems.
— Santa Barbara resident Daniel Petry is the CEO and founding partner of Petry Direct Inc., a 20-year-old management firm that specializes in content production and marketing management. He attended the U.S. Military Academy at West Point, class of 1976, and received a master’s degree in business administration from the University of Colorado.