Thursday, May 21, 2009

WSJ on California tax vote

Golden (State) Opportunity
EXCERPT: "Tuesday's vote was a voter cry that the state needs more such restraints, and now is the time to push them. First, California needs a sturdy cap on the rate of spending growth. Thirty years ago this November, when California's economy was in a similar rut, three-quarters of the voters approved the famous Gann Amendment. That limited the annual growth rate of spending to population growth and inflation.

The result was that California's annual average rate of spending growth after inflation fell to 2% through the 1980s from 9% in the 1970s. California's state per-capita expenditures fell to 16th in the nation in 1990 from 7th in 1979. The economy soared, growing by 121% -- 14% faster than the U.S. average. The Gann limits were effectively neutered in 1988 and 1990 by initiatives that exempted education and transportation from the cap."
Emphasis mine.

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