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September 01, 2009

On the Record With Chuck Devore, Part II

In the second part of my interview with Assemblyman Chuck Devore, we dug into some substantive issues out here in California. I wanted to get a sense of where the senatorial candidate was on recent state-level controversies before moving on to issues of national importance.

The third part of the interview, which includes his thoughts on national issues including energy policy and illegal immigration, will go up tomorrow. [Editor's Note: the third part is now available here.] If you missed it, the first part of the interview, which was about election strategies, is here.


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Gabriel Malor: Sir, I want to talk about some issues—specifically, California issues because I don’t know that much about you. Let’s start with the budget battles. I live and work in California so I want to know what has Sacramento done about the budget and how much is it going to cost me?

Chuck Devore: Well, what Sacramento has done is to spend every last penny that has come in and have delayed making the tough decisions to reform government significantly and to reduce spending to within our means. The liberals, of course, still want to dramatically increase spending and taxes to match. The governor has kind of been in the mode of defer, defer, defer, borrow, smoke-and-mirrors. Anything he can do to just squeeze through, although he did support the tax increase that went through last February, which was the largest tax increase at the state level in U.S. history.* It increased sales tax by the functional equivalent of 14 percent—because a one percent increase in the rate is actually a 14 percent functional increase in the actual collections.

So, that certainly didn’t help the economy. They boosted the income tax brackets by .25 percent. That didn’t help the economy. They increased the car tax by almost double. That didn’t help the economy. And so, these taxes will last about two years.

There was an initiative held on the ballot on May 19th that I opposed— put some effort into opposing.

Which it went down in defeat, right?

Almost two-to-one. The Democrats tried to spin it as simply a reaction against the legislature for punting to the voters. I maintain—and had a fun debate with Senate Majority Leader, the present Pro Tem of the Senate, Darrell Steinberg the day after on NPR, which he was making that assertion—that to the contrary, this was clearly an anti-tax vote. And the proof of it is that on election night the only county in which this vote was passing was San Francisco County. Whereas in fiscally conservative Orange County, where I’m from, it was losing by more than three-to-one. At the end of the day, when all the vote were counted it did lose in every county. But the delta between San Francisco and Orange Counties—which you might argue are the polar opposites in California—the delta was over 50 percentage points difference between what it lost by in San Francisco versus what it lost by in Orange County. That tells me that it was a vote philosophically in opposition to extending the largest tax increase in U.S. history through an additional two years.

And so, concurrent with that vote, the very next day Arnold Schwarzenegger did a 180 and went back to— I call it Schwarzenegger 3.0. He was rebooted. 1.0 was from the time of the election to when he lost his reform initiatives in the special election in November 2005. After that he turned into the post-partisan, left-of-center go-along-to-get-along big government Republican and that lasted until May 19th of this year. And now, once again, he’s the somewhat right-of-center big government reformer. I’d rather have him on my side than against me. So, with him on our side in the wake of the defeat of those initiatives, he swung his support behind the two new Republican leaders in the Big Five, the new Republican leader in the Senate, Dennis Hollingsworth, and Assemblyman Sam Blakeslee.

We held firm on taxes for the second budget revision that we had, where we cut about $24 billion from the deficit, of which of the $14 billion that was reduced about half of it was real. The other half was smoke-and-mirrors. And of the $9 million in revenue, all of it was smoke-and-mirrors or one-time revenue accelerators with no permanent taxes. But, really it was just a modest change in the trajectory—the downward trajectory of the state budget deficit.

The only piece of recurring, non-tax revenue that was in the budget was something I authored. It was a bill that would have opened up the first off-shore oil leases in California in 40 years. It passed the state Senate and then the Sierra Club and other radical environmental groups did a full-court press to kill it. They were able to succeed in the Assembly where it died, I think, on a 43-28 vote. So 43 no, 28 yes. There were a couple Democrats voting for it. And then, of course, the vote was expunged, which got me on Stuart Marty’s show and talking about that.

My last question on the budget and the economy: are we doomed to do this every time the economy sours or is there a long-term solution?

The only solution that California can do is by either changing its tax system to make it less reliant on the high wage-earning individuals, because we have the most progressive income tax structure in the country with the second-highest overall rate. It used to be the highest, but Maryland very unwisely raised their tax rates a few months ago. Now they’re number one. But we have the most progressive structure—it kicks in the earliest as far as the top rate.

That tends to accentuate the revenue surges and troughs as people take capital gains and get bonuses in good times and in not-so-good times don’t. So if we’re not willing to do that—to make the tax code flatter—the only way, the only alternative way is by putting a limitation on the growth of government Either linked to population plus inflation or linked to personal income, which would at least take into account productivity gains.

This could only be done through the initiative process, because anything done statutorily can be undone statutorily.

You’re talking about an amendment.

There has to be a constitutional amendment that would be on the ballot, similar to Prop 13 back in 1978. Now, clearly, the mood is up for it among the people of the State of California. The question becomes then who has the best idea that gets out there and will it be backed by enough money to prevail.

If we do that, so that we can set money aside because we can’t physically spend it, then we can have the progressive tax code that Democrats want and save the money. Now, that progressive tax code is still not conducive to economic growth and jobs development—and clearly we need to do something about that—but the Democrats are kind of locked into this do loop where on the one hand they want to redistribute wealth and they want to punish the businesses and the wealthy and on the other hand by doing so they depress the economy and lower overall revenues.

And you try and explain this to them, “Guys, you can’t have your cake and eat it too.” If you want to have a lot of money to spread around on your social programs, you’ve got to let up on trying to cannibalize the rich. We need more of them in the state, not less of them. Tiger Woods used to live in my district. He lives in Florida now because Florida doesn’t have an income tax. So now, of course, we’ve lost all of his revenue to the state. That doesn’t help anybody.

We have a bit of a battle to go yet in this state and frankly, that’s one of the things that encourages me for my campaign against Barbara Boxer. In her three previous statewide election runs the economy has never been as bad as it will be next year when the Democrats are in control and when this tax and regulatory burden at the state level—enacted by her ideological allies and yet to be put into effect at the federal level—are causing employers to just flee out of the state, to just shut down. As a result, she’ll actually have to answer for her anti-prosperity policies that she’s held for her entire political career like she has never had to before. She’s never had to answer for this because in all the previous election years things were not such that she had to explain herself economically.

Right. While we’re on California issues, let’s talk about Prop 8. People are calling this—the gay rights movement—they’re talking about the “civil rights movement of my generation.” What do you say to that and how did you come down on Prop 8 and what did you think about the California Supreme Court’s resolution to the issue?

Well, first of all, I supported it both by endorsing it and by contributing money to the pro-Pro 8 effort. Secondly, I thought that the California Supreme Court rulings—both of them—have been very poorly written and misguided. They come from a completely incorrect understanding of constitutional law, rule of law. We’re kind of getting into the feelings and the— we want to make people feel good about themselves and be dignified.

Well, I’m sorry. Rule of law is rule of law. You can’t create whole cloth, out of existing statute and constitutional law, a new supposed right of marriage when the very definition of marriage in this country is one man and one woman— eligible man and eligible woman. Obviously, of age and not closely related, etcetera, capable of providing consent.

So, the challenge then becomes when the Supreme Court issues these rulings that run contrary to precedent and statutory law and the Constitution. That, of course, it triggered the Attorney General in this case to re-write the ballot title to say that Prop 8 took away rights. Because at that moment—after it had already qualified, but while it was pending ballot title—when the Supreme Court made that ruling, the Attorney General could then argue with a straight face that it would take away rights. Well that immediately took 10 points off of the support for the initiative. Had that not been the case it would have passed by a far higher margin than it did.

So then you go through the whole campaign, both sides make their best arguments, it passes, which certainly did not surprise people who live in the state. I think everyone east of the Rockies was very surprised because of the perception of what California is. Certainly, that came as a shock to a lot of folks. It didn’t come as a shock to me.

And then when the Supreme Court made their kind of split the baby in two decision that refused to invalidate the 18,000 marriages that had been performed under the erroneous previous decision. The problem with that is that they immediately laid the groundwork for the future invalidation of Proposition 8 by creating a federal equal protection problem under the Fourteenth Amendment. Now you have a class of people who were able to have a same-sex marriage and another class of people who couldn’t because of the accident of timing.

Unlike most conservatives who hailed the Supreme Court ruling, I sent out a statement condemning it on the day of its issue, saying that what the Supreme Court has done by this ruling is once again a miscarriage of justice just like they’ve done in the past. It has laid the groundwork for the invalidation of the constitutional amendment because of this Fourteenth Amendment equal protection problem.

Updated (10:20am): I have altered the original version of the interview transcript to correct errors in the spelling of two names.

I also corrected the marked sentence above. Upon review, the original transcription, in which I thought the Assemblyman stated that Governor Schwarzenegger did not support the February tax increase, was incorrect. The Assemblyman actually said that Schwarzenegger did support the February's tax increase.

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posted by Gabriel Malor at 09:25 AM

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