August 30, 2004
The Honorable Arnold Schwarzenegger
Governor of California, State Capitol Building
Sacramento, CA 95814
SUBJECT: ASSEMBLY BILL 2106 (RIDLEY-THOMAS)
Dear Governor Schwarzenegger:
The League of Women Voters of the Monterey Peninsula urges you to sign AB2106 which would require the Department of Finance to make an annual tax expenditure report to the Legislature with more detailed, useful information than is currently required. This information should be used by the Legislative Analyst and legislative committees for further study and evaluation of selected tax expenditures.
- Tax expenditures are a significant share of state spending and also reduce revenue streams which flow to local governments, yet they remain largely hidden to both legislators and the general public. It's time to get information about them on the public agenda for open review.
- Fairness dictates that tax expenditures should contribute to tax equity, be in the interest of the general public and not just a specific group, and provide social benefits that significantly outweigh the increased tax burden to others.
- These special tax code provisions are called expenditures because they have the same effect as on-budget subsidies or rebates. The value, support for, and effectiveness of on-budget programs are evaluated during the budget process. The value and effectiveness of tax expenditure programs are rarely discussed when priorities for governmental spending are assessed.
- With California's ongoing budget difficulties, it is more important than ever for government to meet standards of efficiency, effectiveness, and accountability. All programs-tax expenditures as well as spending programs-must be required to meet those standards.
- Tax expenditures represent billions of dollars annually in foregone revenues that must be made up by higher tax rates or reductions in spending on government services, or borrowing.
Thank you for your consideration.
Beverly G. Bean, VMD
President, League of Women Voters of the Monterey Peninsula
