State

Jardine: State set to take what the feds give

If you noticed a few more bucks in your paycheck this week, consider yourself stimulated.

The federal government is withholding less money in advance of a $400 per individual or $800 per couple credit that will apply to 2009 income tax returns.

But what the feds giveth, California's state government taketh -- and more besides. In fact, I'd go so far as to suggest the state is double-dipping from the stimulus pot.

A caveat: I never took economics and somehow managed to get through four years of college without taking a math class. I'm not a wanna-be CPA. Investing prowess? Like most everyone else, I lacked the clairvoyance, insider trading connections or offshore accounts to juggle my 401(k) before it dwindled into a 200.5(k) in that highly corruptible casino we know as Wall Street.

On the other hand, it's pretty clear the so-called financial experts have absolutely no clue about the economy, considering the scope of the meltdown and the number of them who couldn't seem to accurately calculate their own income taxes.

So here's my assessment: Calling it the "Make Work Pay" program, the feds want to jump-start the economy by taking less of our money. That, in theory, will leave us more to spend at the liquidation sales and brimming with the confidence to run up big credit-card balances again.

As another element of the stimulus package, the state will get a lump sum of about $50 billion, supposedly further igniting the economy by putting people back to work on transportation and other projects.

But as part of the budget deal in February, the state will raise our income taxes, an average of $1,000 per year for a working family, according to projections. It also will dramatically increase vehicle license fees and add a penny per dollar to the sales tax.

So that extra $35 or so you thought you'd see on each paycheck will be siphoned off by the state in the form of those higher taxes and fees.

Add the pay cuts or salary freezes affecting so many people, along with food prices expected to rise because of the water shortage, and many families can expect to see their disposable income drop by several thousand dollars for the next couple of years.

The consolation comes from still having a job when so many others have lost theirs.

The kicker comes in May, when you're given the opportunity to vote to extend those additional taxes through 2012 and the car fees through 2013 in a series of propositions in a special election.

This was part of the deal brokered on the Republican side by Sen. David Codgill of Modesto as legislators negotiated to eliminate a projected $42 billion budget shortfall.

M embers of his party ousted Cogdill from his leadership post because he agreed to $12 billion in temporary tax and fee increases as part of a budget plan that included propositions designed to address decades of fiscal craziness on both sides of the aisle.

If the propositions fail, Republicans are threatening draconian measures that, of course, would come crashing down upon Stanislaus and the other 57 counties and their cities, school districts and social services agencies.

"If we don't pass these, taxes will be completely off the table," said Assemblyman Tom Berryhill, R-Modesto. "They rolled the dice that these propositions would pass so we can limit government spending for future generations."

Berryhill said that though he voted against the budget, he has no choice but to support the propositions.

"If the propositions don't pass and we end up $15 (billion) to $20 billion upside down, I don't know how we'll ever get out of it," Berryhill said.

"You can't cut and tax your way out of it. We have to change the direction of California and the way we do business in California, and that's what Dave tried to do. The rest is in the hands of Californians."

Passing through your hands might be a better description.

Stimulated yet?

Jeff Jardine's column appears Sundays, Tuesdays and Thursdays in Local News. He can be reached at 578-2383 or jjardine@modbee.com.

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