Sacramento, CA – In response to Tom Campbell’s insistence as he entered the U.S. Senate race on his record as a fiscal conservative, Carly for California Deputy Campaign Manager Julie Soderlund today made the following statement:
“So far, Tom Campbell’s rationale for his electoral flip-flop has been long on rhetoric about his credentials as a ‘fiscal conservative,’ but his record reveals just one problem: those credentials are well past their expiration date. While Tom would like to point to his time in Congress in the 1990s, he cannot escape the last decade, where he has championed big-government budgets and higher taxes.
“For example, while he touts his record as the Governor’s budget chief, it turns out he actually presided over the largest increase in general fund spending in history and championed a budget that relied on borrowing and unsustainable spending that the state clearly couldn’t support. And, just last year during his bid for governor, he advocated for a 32-cent gas tax increase as the solution to California’s chronic budget deficit.
“As much as most of us would like to use our expired credentials featuring younger photos, that won’t get you far when boarding an airplane. In the same way, trying to mask your real views on the issues won’t get you far with Californians, especially when your new look involves more taxes and more government spending.”
Tom Campbell Presided Over A State Budget Based On Borrowing And Unsustainable Spending
In 2005, Campbell presided over the largest year-over-year increase in state general fund spending to date. Yet today, he tries to make the case that he wants to reduce spending at the federal level. Actions speak louder than words, and Tom Campbell has proven that, in the 21st century, his priorities are more government spending and higher taxes to foot the bill.
With Campbell serving as Gov. Schwarzenegger’s chief fiscal policy advisor and with the supporting vote of Chuck DeVore, the 2005 budget contained the largest year-over-year increase in General Fund spending in state history – increasing by nearly $11.8 billion from $79.8 billion in FY 2004-05 to $91.6 billion in FY 2005-06. (Governor’s Budget Summary 2009-10, Appendices and Schedules, Schedule 6)
According to the nonpartisan, independent Legislative Analyst, Tom Campbell’s 2005 budget added “several billions of dollars” to the state’s projected budget shortfalls. This budget was based on faulty and politically expedient assumptions – something that especially an economist like Tom Campbell should have known. This set up the state for 2007’s total budget collapse.
Just Months After The 2005 Budget Was Passed, The State’s Nonpartisan Legislative Analyst Found California’s Fiscal Outlook “Still Faces Major Challenges” And Astutely Predicted An Economic Downturn Would “Add Several Billions Of Dollars To The Projected Shortfalls.” “An economic downturn or even sharp slowdown sometime in the next several years would add several billions of dollars to the projected shortfalls. While the improved fiscal outlook is clearly very good news, the state still faces major challenges in achieving an ongoing balance between revenues and expenditures and getting its fiscal house in order. Even assuming continued steady economic growth, we project that multibillion-dollar operating deficits (that is, annual shortfalls between revenues and expenditures) will persist throughout most of the forecast period. Eliminating these shortfalls will require significant actions. Beyond this, an economic downturn or even sharp slowdown sometime in the next several years would add several billions of dollars to the projected shortfalls, and while this is not our baseline forecast, it could always occur. For these reasons, it will be important for the Legislature to continue to take actions to minimize operating shortfalls, match any new or increased program funding with offsetting savings or revenues, avoid using the remaining deficit-financing bonds in 2006-07, and build up budgetary reserves.” (California Legislative Analyst’s Office, “California’s Fiscal Outlook: LAO Projections 2005-06 Through 2010-11,” November 2005)
Republicans Punted On Limiting State Spending And Pushed Through A Budget Plan, Despite Certainty Over The Following Year’s “Multi-Billion-Dollar Debt.” “Even so, all sides agree that the state still will face a multi-billion-dollar debt next year. Republicans said they will continue to work to cut state spending.” (Lynda Gledhill, “Schwarzenegger, Top Lawmakers Reach Budget Deal,” San Francisco Chronicle, 7/6/05)
Tom Campbell’s version of a “balanced” budget includes borrowing and does not include its impact on the state’s structural out-year deficit. Again, something an economist like Tom Campbell should know. Not to mention the fact that Campbell’s claim that he was the last finance director to balance a budget is totally false – passing a “balanced” (relative term that applies only to one year) budget is required by the state constitution.
Campbell “Conceded That The Budget Contains Significant Borrowing.” “Tom Campbell, Schwarzenegger’s new finance director, conceded that the budget contains significant borrowing. But he said there wasn’t anything deceptive about it.” (Gary Delsohn, “Plan Relies Heavily On Borrowing,” Sacramento Bee, 1/11/05)
Campbell Blamed The Political Process For The Excessive Spending And Borrowing Contained In The 2005 Budget. “That, says Schwarzenegger’s finance director, Tom Campbell, is what drove up the state’s spending numbers so much this year. He also said leaders from the Democratic-controlled Legislature simply would not accept the depth of cuts the governor sought. ‘The governor would have liked to (cut more) as well, and a budget in the present context requires compromise and this was the best agreement that could be reached,’ Campbell said. ‘It’s the process. That’s clearly the result of bargaining.’” (Alexa H. Bluth, “Governor Caught In Spending Trap,” Sacramento Bee, 8/14/05)
Tom Campbell Advocates For Tax Increases
As recently as 2009, Tom Campbell has expressed support for tax increases, an idea not supported by voters regardless of their party affiliation. Despite Tom Campbell’s repeated reference to his views held in the 1990s on this issue, reality is that his views have changed.
Campbell Supported An Extension Of Temporary Tax Hikes In 2009. “One potential Democratic gubernatorial rival, Los Angeles Mayor Antonio Villaraigosa, endorsed Proposition 1A last week. A Republican hopeful, former Rep. Tom Campbell, also has backed the measure. Proposition 1A would limit future spending growth and transfer money into a “rainy-day fund” to be used in economic slowdowns. That part has drawn fire from some labor unions. But Proposition 1A also would extend $16 billion worth of temporary tax hikes on sales, income and vehicles by as many as two more years, which has angered anti-tax groups.” (Kevin Yamamura, “Brown Says Prop. 1A Will Help ‘Next Governor,’” Capitol Alert, 4/14/09)
Campbell Proposes Raising California’s Gas Tax By 32 Cents. “Campbell, who was Schwarzenegger’s finance director in 2004-05, also has employed a potentially risky strategy by outlining on his Web site (www.campbell.org) exactly how he’d close the state’s $24 billion deficit. Perhaps the most unusual piece is a temporary 32-cent gas hike; he’d use the money to prevent the firing of teachers, an increase in class sizes and elimination of community college courses. In a talk before the Silicon Valley Leadership Group on Friday, Campbell acknowledged that recommending a gas tax was ‘third-rail politics.’” (Ken McLaughlin, “Can Tom Campbell Upset Billionaires Running For California Governor?,” San Jose Mercury News, 6/19/09)
“He Also Would Not Rule Out Taxing Sales On The Internet.” (Peter Nicholas and Evan Halper, “State Gets A New Finance Chief,” Los Angeles Times, 11/5/04)
Conservatives Balk At Campbell’s Positions, Such As His Support For Tax Increases. “Social conservatives also balk at Campbell’s support of abortion rights, gay marriage and some tax increases.” (Jack Chang, “Campbell Stresses Policy Experience In California Race For Governor,” Sacramento Bee, 10/13/09)