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Gubernatorial hopeful Tom Campbell outlines budget fixes

Former Stanford professor and congressman advocates cuts and gas tax

Republican gubernatorial hopeful Tom Campbell Thursday called for budget cuts and a temporary gas tax to close California's $26.3 billion budget gap.

Campbell, the state's finance director in 2004-2005, said $16 billion in savings could be achieved if automatic increases in social-welfare benefits and state employee pay were slowed and brought into line with the national average.

Another $4 billion could be carved out with an "expenditure freeze," he said. The final $6 billion should come from new revenue -- a one-year gasoline tax that would raise the price of gas from roughly $3 per gallon to $3.32 per gallon, he said.

The former Stanford Law School professor and five-term GOP congressman made his budget proposals to the business-oriented Association for Corporate Growth in a dinner meeting at Fremont Hills Country Club in Los Altos Hills.

California's current fiscal emergency results from an unprecedented drop in revenue caused by the national recession combined with the state's penchant for spending beyond its means, Campbell said.

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Noting that the state's operating budget relies heavily on revenue from the notoriously cyclical personal-income tax, he also called for long-term reforms in state finance.

"If we don't have systemic improvement in how we conduct our state finances we will drive businesses to other states" such as Nevada, Arizona and Texas, he warned.

To control overspending, Campbell advocated restoration of the "Gann limit," a constitutional amendment in effect from 1979 to 1989 that limited annual spending to a formula based on inflation and population growth.

Had the Gann limit been operating for the past decade, California would have a $2 billion surplus today despite the recession, he said.

Campbell also called for an automatic five-year sunset on state regulations, at which point they would require re-evaluation before they could continue. He expressed skepticism that cap-and-trade rules, a market system for controlling pollution, could be implemented well in California.

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He also advocated litigation reforms to place a greater burden on losing parties for the cost of "frivolous lawsuits."

Eventually, he said, California should move to a budget cycle in which the state would accumulate revenues one year that would not be spent until the following year, clarifying for all parties exactly how much is available.

Saying that just 3 percent of Californians are responsible for 50 percent of personal-income tax revenues, he argued that adding taxes will drive business from the state.

"It is widely believed we can solve our problem if only the wealthy would pay their fair share. When I was a state senator and finance director I heard this on a daily basis," Campbell said, adding that it is a misconception.

Campbell predicted the current budget emergency would be solved through some combination of a fire sale of state assets, possibly with the involvement of a judicial master; a "plug" in the budget calling for elimination of unspecified waste; and the possibility of Gov. Arnold Schwarzenegger employing the line-item veto.

He raised the possibility of an "Obama ex machina" scenario, in which the federal government bails out the state while imposing tough reforms, allowing the president to solve the crisis while establishing a record of fiscal responsibility.

The professorial Campbell, currently on leave from the Haas School of Business at the University of California at Berkeley for a term as visiting professor at Chapman University in Orange, handed out charts on the federal budget, GDP (gross domestic product) rates, trends in housing and oil prices and taxes.

"Republicans in Berkeley are a little bit more rare than Republicans in Orange County," he joked.

Campbell, who took a leave from the Stanford Law School faculty to represent Silicon Valley in Congress for most of the 1990s, joins a Republican field of gubernatorial candidates with strong ties to the Palo Alto area.

Former eBay CEO and Atherton resident Meg Whitman announced her candidacy in February. Silicon Valley entrepreneur, cybersecurity expert and current state Insurance Commissioner Steve Poizner also is seeking the 2010 GOP nomination for governor.

Democratic contenders are San Francisco Mayor Gavin Newsom and former governor and current State Attorney General Jerry Brown, who served as mayor of Oakland from 1998 to 2006. Another Democrat who was considered likely, Los Angeles Mayor Antonio Villaraigosa, has bowed out of the race.

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Gubernatorial hopeful Tom Campbell outlines budget fixes

Former Stanford professor and congressman advocates cuts and gas tax

by / Palo Alto Online

Uploaded: Fri, Jul 10, 2009, 9:31 am

Republican gubernatorial hopeful Tom Campbell Thursday called for budget cuts and a temporary gas tax to close California's $26.3 billion budget gap.

Campbell, the state's finance director in 2004-2005, said $16 billion in savings could be achieved if automatic increases in social-welfare benefits and state employee pay were slowed and brought into line with the national average.

Another $4 billion could be carved out with an "expenditure freeze," he said. The final $6 billion should come from new revenue -- a one-year gasoline tax that would raise the price of gas from roughly $3 per gallon to $3.32 per gallon, he said.

The former Stanford Law School professor and five-term GOP congressman made his budget proposals to the business-oriented Association for Corporate Growth in a dinner meeting at Fremont Hills Country Club in Los Altos Hills.

California's current fiscal emergency results from an unprecedented drop in revenue caused by the national recession combined with the state's penchant for spending beyond its means, Campbell said.

Noting that the state's operating budget relies heavily on revenue from the notoriously cyclical personal-income tax, he also called for long-term reforms in state finance.

"If we don't have systemic improvement in how we conduct our state finances we will drive businesses to other states" such as Nevada, Arizona and Texas, he warned.

To control overspending, Campbell advocated restoration of the "Gann limit," a constitutional amendment in effect from 1979 to 1989 that limited annual spending to a formula based on inflation and population growth.

Had the Gann limit been operating for the past decade, California would have a $2 billion surplus today despite the recession, he said.

Campbell also called for an automatic five-year sunset on state regulations, at which point they would require re-evaluation before they could continue. He expressed skepticism that cap-and-trade rules, a market system for controlling pollution, could be implemented well in California.

He also advocated litigation reforms to place a greater burden on losing parties for the cost of "frivolous lawsuits."

Eventually, he said, California should move to a budget cycle in which the state would accumulate revenues one year that would not be spent until the following year, clarifying for all parties exactly how much is available.

Saying that just 3 percent of Californians are responsible for 50 percent of personal-income tax revenues, he argued that adding taxes will drive business from the state.

"It is widely believed we can solve our problem if only the wealthy would pay their fair share. When I was a state senator and finance director I heard this on a daily basis," Campbell said, adding that it is a misconception.

Campbell predicted the current budget emergency would be solved through some combination of a fire sale of state assets, possibly with the involvement of a judicial master; a "plug" in the budget calling for elimination of unspecified waste; and the possibility of Gov. Arnold Schwarzenegger employing the line-item veto.

He raised the possibility of an "Obama ex machina" scenario, in which the federal government bails out the state while imposing tough reforms, allowing the president to solve the crisis while establishing a record of fiscal responsibility.

The professorial Campbell, currently on leave from the Haas School of Business at the University of California at Berkeley for a term as visiting professor at Chapman University in Orange, handed out charts on the federal budget, GDP (gross domestic product) rates, trends in housing and oil prices and taxes.

"Republicans in Berkeley are a little bit more rare than Republicans in Orange County," he joked.

Campbell, who took a leave from the Stanford Law School faculty to represent Silicon Valley in Congress for most of the 1990s, joins a Republican field of gubernatorial candidates with strong ties to the Palo Alto area.

Former eBay CEO and Atherton resident Meg Whitman announced her candidacy in February. Silicon Valley entrepreneur, cybersecurity expert and current state Insurance Commissioner Steve Poizner also is seeking the 2010 GOP nomination for governor.

Democratic contenders are San Francisco Mayor Gavin Newsom and former governor and current State Attorney General Jerry Brown, who served as mayor of Oakland from 1998 to 2006. Another Democrat who was considered likely, Los Angeles Mayor Antonio Villaraigosa, has bowed out of the race.

Comments

Hilary Smith
another community
on Jul 10, 2009 at 10:25 am
Hilary Smith, another community
on Jul 10, 2009 at 10:25 am

America is a society in decline because it's become politically incorrect to tax the rich. They've convinced us that they're some kind of persecuted minority. Please.


geez
Meadow Park
on Jul 10, 2009 at 11:39 am
geez, Meadow Park
on Jul 10, 2009 at 11:39 am

It has become politically incorrect to tax "the rich"??? The top 25% paying 85% of the tax bill isn't enough? The bottom 48% paying absolutely nothing, and in fact the bottom 20% receiving? What more do you want? Let's just each of us go to one person who makes more than we do, and take $1,000 from them. That would be fair.

Did you know that we could abscond every dollar above $75,000 that every person in America makes this year, and it still wouldn't pay what we are spending?

If it isn't PC to tax the rich, what do you call the ideology we elected to Congress 2 1/2 years ago, and to the White House last November? Why do you think our economy isn't recovering?

Oh..sorry, we gotta scare "the rich" even more by telling them we are going to take even more of their money, and regulate their businesses even more. THAT will help our economy recover rapidly. Just like Obama was elected partially because we had so much national debt, and the Republicans lost the 'brand' of being fiscally responsible as a result..so of course the thing to do is to QUADRUPLE our national debt to try to pull us out of debt...huh?

By the same logic, if I have diabetes from being overweight, I should eat more. If I have emphysema from smoking, I should smoke more.

Geez. Keep voting in marxist "redistribute the wealth it is only fair philosophies", and you will keep getting the economy you want.


Kludged
Barron Park
on Jul 10, 2009 at 11:46 am
Kludged, Barron Park
on Jul 10, 2009 at 11:46 am

Reminder: This "independent" republican was one of the deciding votes in the house of representatives to impeach Bill Clinton. What ever he says can't be trusted; He will toe the party line.


Mike
University South
on Jul 10, 2009 at 12:58 pm
Mike, University South
on Jul 10, 2009 at 12:58 pm

Tom Campbell not only voted for impeachment against the will of his constituents, he had the audacity to tell his constituents OFF. Plus, he said that would all be forgotten by election time. How wrong he WAS!


Walter_E_Wallis
Registered user
Midtown
on Jul 10, 2009 at 3:38 pm
Walter_E_Wallis, Midtown
Registered user
on Jul 10, 2009 at 3:38 pm

Tom also advocated a "Scenic Easement" as reason to deny offshore drilling rigs; My comment about that in the PA Times earned me a broken bottle of crankcase drainings from EarthFIRST in my driveway. I am voting for Palin or Rice unless Tom shows some rally.


Sharon
Midtown
on Jul 10, 2009 at 5:42 pm
Sharon, Midtown
on Jul 10, 2009 at 5:42 pm


California has the 8th largest economy in the world.

The next gov should be some one who has run a major business like E Bay.
Not some political hack or moonbeam lawyer.


Walter_E_Wallis
Registered user
Midtown
on Jul 10, 2009 at 10:11 pm
Walter_E_Wallis, Midtown
Registered user
on Jul 10, 2009 at 10:11 pm

Or someone who has run a state larger than California?


GoTom
Adobe-Meadow
on Jul 11, 2009 at 6:39 am
GoTom, Adobe-Meadow
on Jul 11, 2009 at 6:39 am

First - Clinton s/have been impeached - using the oval office for BJs, then lying under oath and compromising our leadership. Nixon was impeached for lying, not breaking and entering.

Second - Scenic easements sound like a valid and appropriate defense against oil rigs off our coast - it beats taking paint thinner to the beach to clean the tar off - been there, done that, no thanks!

Third - Sorry, presiding over ebay - a flea market - does not trump serving as a Stanford Economics professor, running the world's #1 rated public Business School- UCB, Directing Competition for the FTC, Leading the California Dept. of Finance and serving in the US Congress

He is by far the best mind in the state, maybe the country - he knows Economics far better than Barack and company.

"California Journal rated him the Best Problem Solver in the State Senate, the Most Ethical State Senator, and the overall Best State Senator."

Web Link


Walter_E_Wallis
Registered user
Midtown
on Jul 11, 2009 at 7:56 am
Walter_E_Wallis, Midtown
Registered user
on Jul 11, 2009 at 7:56 am

Most of the spills have been from tankers needed to bring in foreign oil while more than enough domestic oil has been locked up for mostly specious reasons.
Trade you for a scenic easement over the Altamont?
Stanford - isn't that where Paul Ehrlich works?
Tom is a nice guy like a non-promiscuous Gingrich; We need a republican Willie Brown to tame the stampeding spending herd in Sacramento.


Perspective
Midtown
on Jul 11, 2009 at 9:45 am
Perspective, Midtown
on Jul 11, 2009 at 9:45 am

Thank you GoTom for reminding those who read this that Clinton was impeached for LYING UNDER OATH in the obstruction of a case..the same as Nixon.

Americans tend to forget that little part.

Campbell did the right thing in supporting the impeachment.

I am QUITE wary of him, though...I have become very suspicious of anyone rising in politics in an environment like California. Takes an extremely strong person to stick with sound economic principles here.

I can't wait for McClintock to make it far enough up the ladder to run for Gov, or better yet...POTUS. THEN we will have sound economics, integrity, AND spine in the White House. ( At this point I would take even 2 out of the above 3..any two)


Dennis
Downtown North
on Jul 12, 2009 at 9:34 pm
Dennis, Downtown North
on Jul 12, 2009 at 9:34 pm

Maybe Mr. Wallis will settle for a Palin-Boehner.


Walter_E_Wallis
Registered user
Midtown
on Jul 13, 2009 at 4:02 am
Walter_E_Wallis, Midtown
Registered user
on Jul 13, 2009 at 4:02 am

"Maybe Mr. Wallis will settle for a Palin-Boehner."
I could live with that.


Susan
Southgate
on Jul 13, 2009 at 8:57 am
Susan, Southgate
on Jul 13, 2009 at 8:57 am

I'm a Democrat who likes the sound of at least some of Campbell's fiscal reforms. Holding cost of living increases for a bit and raising the gasoline tax temporarily seem like reasonable measures. Holding funds for a period of time before spending them may also be reasonable in at least some instances.

Unfortunately, Mr. Campbell doesn't mention what I believe to be one of the most important culprits in our fiscal crisis: budgeting by proposition. As a Democrat, I of course like the democratic aspects of the proposition process, but how can a budget possibly be managed if people are making decisions about spending without being able to see the whole budgetary picture? Perhaps propositions could be used to direct the Legislature to work a new initiative into the budget or some other compromise, but voting for vague expenditures without understanding all the ramifications is nuts.


Funny Perspective
Stanford
on Jul 13, 2009 at 9:11 am
Funny Perspective, Stanford
on Jul 13, 2009 at 9:11 am

Perspective is so funny. On other threads he was saying that Palin would be perfect as POTUS--now it is Campbell. BY the way, we do have economics, integrity, AND spine in the White House now.
Dennis, i do not think that Walter got your joke.


Walter_E_Wallis
Registered user
Midtown
on Jul 13, 2009 at 11:38 am
Walter_E_Wallis, Midtown
Registered user
on Jul 13, 2009 at 11:38 am

Highly unlikely at my age.


Perspective
Midtown
on Jul 13, 2009 at 3:23 pm
Perspective, Midtown
on Jul 13, 2009 at 3:23 pm

FP: Be sure to check back here in 3 years and tell us how well all that spine, integrity and economics in the WH is working out for you, ok?

I am sure that Mr. Wallis got "the joke", but being a civilized gentleman who has learned that gutter humor just lowers all to the gutter, chose to ignore it ( as did the rest of us).


Hugo
Adobe-Meadow
on Jul 13, 2009 at 8:53 pm
Hugo, Adobe-Meadow
on Jul 13, 2009 at 8:53 pm

[Post removed by Palo Alto Online staff.]


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