COMMUNITY COMMENTARY:

With a budget crisis that is occupying the mind of every California legislator, discussions have begun to revolve around potential solutions to fix the enormous state deficit.

Today, California’s budget deficit stands at $17.6 billion. Expenditures have increased by $1.6 billion since last year. Even worse, one of the proposed solutions is to raise the state sales tax by 1%.

Somewhat surprisingly, the state’s revenues are holding steady, despite a slowing economy. This proves the point California Republicans have been making for a long time: The budget crisis is not the result of a revenue problem, but a spending problem.

California lawmakers need to look at other pots of unused state funding. For instance, redirecting First 5 money to other children’s programs such as health care, using Proposition 63 (Mental Health Initiative) funding for mental health services and selling the state’s many surplus properties.

A recent study done by the American Legislative Exchange Counsel reveals a significant number of people are leaving California. This is significant because it marks the first time in California history that more people are leaving than moving into the Golden State.

The latest Census Bureau data indicated that in 2005, 239,416 people left, with similar numbers of emigrants in 2003 and 2004.

The native-born out migration flows have become so systemic that the cost to rent a U-Haul trailer to move from Los Angeles to Boise, Idaho, is $2,090 — six times more than the cost of moving in the opposite direction.

The weight of California’s tax burden is very clear when you compare the amount of taxes each Californian pays relative to residents of other states. According to the most recent data available from the U.S. Census Bureau, Californians pay an average of $2,392 in state taxes, the highest per person of the eight largest states.

The real growth killer is California’s steeply “progressive” income tax with a 10.3% rate applied to high-income residents — the highest in the nation outside New York City.

The richest 10% of Californians pay almost 75% of the income tax burden in the state.

California’s employers are also feeling the pinch. This year, California’s business tax climate ranks 47th in the nation, based on 113 factors analyzed by the Tax Foundation.

Increasing the high tax load businesses already bear will make employers less likely to move to, remain in or expand operations in California. Not to mention that the cost for businesses to comply with California’s rules, regulations and bureaucracy is more than twice as high as other Western states.

Higher taxes don’t guarantee increased revenues over time, because prohibitive tax rates tend to drive businesses away, limiting future revenues and taking jobs with them.

Business tax savings are one of the primary reasons for large scale job relocations from one U.S. state to another.

A recent Wall Street Journal article summed it up perfectly: “California already boasts some of the highest energy prices, highest taxes and toughest regulatory regimes in the U.S. Many of its businesses already depend on lower-cost energy from nearby states, and that practice will likely increase. Others have been looking for an excuse to leave the state for better business climates, and a costly global warming mandate could be the final enticement. One irony is that those companies that do depart for other states or other countries, such as China or India, may well be allowed to emit even more CO2 than they do now.”

Driving away California’s tax base won’t solve our perpetual budget crisis; it will only weaken our economy. Californians are paying more at the gas pump, at the grocery store, and for other goods and services. The last thing the Legislature should do is to raise the sales tax or any kind of tax on Californians.

Taxpayers need a break. Common sense solutions will improve the economy, protect jobs and the taxpayer.

TOM HARMAN is a senator representing the 35th District.