By John Howard | 05/07/10 12:00 AM PST

SACRAMENTO
April 27, 2010 11:03am

But spending cuts would not offset the slash in revenue, leading to further budget problems for the state, says David Kersten, founder of Kersten Communications in Sacramento, a public policy research and analysis company that specializes in budget, tax, and fiscal issues.

“When the state’s in a $20 billion deficit, you can’t propose tax cuts on this magnitude when we can’t even pay for what we have right now,” says Mr. Kersten. “Voters should be careful. If it sounds too good to be true, it probably is.”(David Kersten talks about what he found in his analysis in a CVBT Audio Interview. Please left-click on the link below to listen now or right-click to download the MP3 audio file for later listening.)

Both the Poizner and Whitman tax cut plans would increase the state’s structural $20 billion budget deficit by more than $10 billion a year, according to the analysis.Spending cuts to offset that would essentially dismantle state government, Mr. Kersten contends.  He says both tax plans would provide “very marginal” economic benefits to the state at best and only really serve “to benefit the wealthy and ultra rich.

”He contends both candidates “would reap significant savings, likely to be in the millions of dollars range, potentially tens of millions of dollars, in their own tax bills from their proposed reductions in the state capital gains tax.” 

Drilldown

Kersten Communications, Lenny Goldberg and the California  Tax Reform Association have released new research in support of a bill in the California Legislature which would close major loopholes in the California property tax system. 

The research, which is represented in the SF Examiner article below that also appeared in the California Progress Report, was completed by Kersten Communications with funding by the California Tax Reform Association.  Assemblymember Tom Ammiano (D-San Francisco) is carrying AB 2492 which would represent a statutory fix to one of the biggest loopholes in the state’s tax system—the California property tax. 

Additional information releases are planned in the coming weeks and months. 

For more information on the reform effort contact:  research@kerstencommunciations.com.  

With AB 2492, State Would Close a ‘$7.5 Billion’ Annual Corporate Tax Loophole

San Francisco Examiner, March 30, 2010

By Dan Aiello

The idea of a revision to the state’s property tax law – established with passage of Proposition 13 more than three decades ago – is in no way new to Sacramento.

It was born with the post-Prop 13 realization that what came to legally define a commercial property sale was not the same as what traditionally defined a residential property sale and revisionist proponents claim it was that legal definition which created a corporate tax loophole unintended by the overwhelming number of California voters who supported – and still support – the “stable tax” Jarvis-Gann initiative.

The idea to revise Prop 13′s commercial property exemption has been championed by former Senators Quentin Kopp (I-SF) and Martha Escutia (D-LA) over the course of a decade, and more recently by Warren Buffet while acting as Governor Schwarzenegger’s financial advisor and as legislation sponsored by the California Teacher’s Association desperate to turn around the state’s lagging national ranking in per-student spending ratios.

In 2010, Assembly member Tom Ammiano (D-SF) is the new standard bearer for revising the state’s property tax code – which would require voter approval – as he introduces AB 2492, a ‘homeowner-exempt’ split roll revision intended to “close the loophole” created for commercial property owners with the passage of Prop 13.

“We used to have a parity,” between residential and commercial property taxes, Assembly member Ammiano told California Progress Report. “But now, I think we need this reform.”

Ammiano contends that, while he understands that California voters still overwhelmingly support Prop 13, he believes most voters do not realize that the legal definitions of what constitutes a property sale following passage of the initiative created a corporate tax loophole so big that most of the commercial property in the state over the last 30 years has been driven through it, avoiding the same reassessment that occurs when any comparable residential property is sold.

And over time, the avoidance of reassessment by commercial property owners has meant noticeable declines in commercial property tax revenue share in at least two counties.

‘A virtual flip’ in property tax burden

Proponents of AB 2492 claim there has been a profound shift in the tax burden from commercial property to residential homeowners because of the existing commercial property tax loophole created, not by Prop 13, but by the definition of a sale following the initiative’s passage.

In Los Angeles County, in 1979, residential property contributed 40 percent of total property tax revenue. By 2009 residential property’s share increased to 56 percent of all property tax revenue, according to Ammiano’s Communications Director, Quintin Mecke.

Commercial property in Los Angeles County likewise flipped, decreasing from 47 percent of all property tax collected in 1979 to 31 percent today, claims Mecke.

In San Francisco County, residential property owners increased their percentage of property tax revenue from 41 percent in 1979 to 57 percent last year, while commercial property saw a decrease from a 59 percent to a 43 percent in 2009 revenue share, according to the San Francisco Assessor’s office.

Asked if there were any factors that would explain the figures, San Francisco Assessor and “Close the Loophole” advocate, Phillip Ting, pointed out that the city’s population has remained largely stagnant, only increasing by 50,000 residents over the last 60 years, while the ‘Manhattanization of San Francisco’ undertaken by then-Mayor Dianne Feinstein through the late 70’s to mid 80’s, along with continued commercial property growth since – an increase in commercial square footage Ting called “significant,” – should be reflected in an increase in commercial tax revenue and total tax share, not the decrease evidenced today.

When a sale is not a sale

The issue is simple, claims Ting, a proponent of the legislation and the person behind the web site, closetheloophole.com. “The definitions that you and I hold about what defines a sale are much different than the legal definition that has been created following passage of Prop 13,” Ting told CPR.

Ting gave one abstract example where a commercial property sale is not treated the same as a residential property sale.

It is referred to as Legal Entity Ownership. If a property is owned by a legal entity in which four individuals each own a 25 percent interest, then if an individual sells their 25 percent interest in the legal entity to someone else, no reassessment will occur. This is true even if each of the four individuals sell their interests to other persons. Only if one person or entity obtains control (more than 50 percent) will a change in ownership be triggered.

Because commercial property becomes part of a business, the property ownership often transfers with the ownership of the business, but the property itself is not subject to reassessment.

An alarming number of commercial properties fail to meet the legal definition of sale.

Specific examples where sales are not sales

“I just received a letter last week from the Board of Equalization regarding the JP Morgan acquisition of Washington Mutual informing me that the board determined this did not constitute a sale,” said Ting.

According to Ting, the BOE’s determination prevents a statewide reassessment of the hundreds of Washington Mutual locations. That means every Washington Mutual bank statewide will not be reassessed unless individual county assessor’s choose to challenge the BOE findings.

Similar financial institution mergers have left properties legally “unsold,” for purposes of tax reassessment, including The Bank of America – Security Pacific merger, and the Bank of America – Nation’s Bank merger, which included the Bank of America headquarters on California Street.

Doesn’t it strike you as strange that we are giving these huge financial institutions these property tax breaks while the Federal government is giving them huge bail outs?” asked Ting.

Assembly member Ammiano points to the recent sale of Jiffy Lube to Shell Oil. According to Ammiano, none of the Jiffy Lube locations in the state were reassessed, though he believes California’s voters would consider the properties to have sold.

In 2002, Shell Oil Company purchased Pennzoil Quaker State, which owns the Jiffy Lube Franchise, but two San Francisco Jiffy Lube stations have not been reassessed.

According to the San Francisco Assessor’s Office, the Jiffy Lube located at 6099 Geary Blvd. was last reassessed in 1984, 26 years ago, and is listed as being owned by Jiffy Lube International.

The Jiffy Lube located at 2030 Van Ness is listed as being owned by Rosalie S. Anixter in 2008. The owner of the property in 2007 was listed as Sandra Jeanne Hyman Trust. Despite what appears to be a clear sale of the property to a new owner, the property was last assessed 25 years ago, in 1985, and is not considered to have been sold under the legal definition of commercial property sales.

And that, says Ammiano, is just plain wrong.

Ammiano told CPR that while he’s aware the California Chamber of Commerce and other business lobbying organizations have been traditionally opposed to split roll tax revision, he doesn’t see this as a business versus resident fight, and points to the business-to-business disadvantage the current tax loophole gives to independent and small business owners trying to break into any market, like the independent oil changer trying to compete with the Jiffy lube stations.

Ting concurs.

“When you have tax subsidies, they’re generally given to new businesses to help them get started,” says Ting. “We’ve created a huge barrier to new businesses that are at a huge disadvantage competing with businesses not paying half the property tax. And where are these subsidies going?”

Ting says often the subsidy is simply going out of state. “We’ve created a tax structure that’s taken money away from students and given it to large corporations,” Ting told CPR.

CalChamber’s tax guide, which was forwarded to CPR in lieu of an interview with spokesperson Kyla Christofferson, claims it knows.

“Higher property taxes could unfortunately result in higher rents for the thousands of California businesses that lease their commercial space,” Christoffersen said in a March 11, 2008 press release. “This could significantly worsen the already-troubled housing market and state budgetary situation.”

“That isn’t the way the market has been driven, not based on taxes, otherwise you’d see prices all over the place on rents,” responded Ting. “So in some cases that argument has fallen flat on its face.”

CalChamber’s tax guide also threatens that every percent increase in taxes on business will result in loss of 43,000 California jobs.

“People are resorting to scare people about losing jobs,” said Ting. “We’ve transferred wealth from students and teachers to [in many cases out of state] commercial property owners. We are, for the first generation in California history, passing a worse life on to our children, which is what we’ve been doing for the last ten years.”

“We pay half per pupil what New York and New Jersery pay for education. Half,” said Ting.

Business to Business disadvantage

Ammiano cites the tale of two hotels at Fisherman’s Wharf. In 2008, according to the San Francisco Assessor’s Office the Holiday Inn located at 1300 Columbus Avenue in Fisherman’s Wharf was purchased by FJM Wharf Associates LLC. However, according to the San Francisco Assessor’s Office the property has not been reassessed at market value. The property was last reassessed at market value in 1993. The property’s land values for 2007 and 2008 are $15,508,814 and $15,818,990, respectively. A neighboring property across the street, Courtyard by Marriot which was last reassessed at market value in 2005 has a land value of $29,442,154, despite having a much smaller lot 55,688 square feet compared to Holiday Inn’s 81,060 square foot lot.

Revision proponents say they want Prop 13 protected

When passed in 1978, Proposition 13 capped property tax rates at 1 percent of assessed value, and restricted that value from growing more than 2 percent a year.

“Prop 13 passed for a very specific reason, people were losing their homes because they could no longer pay their taxes,” said Ting. “We have to ensure that never happens again.”

According to Ting, that is the reason why AB 2492 specifically exempts residential property from any tax revision.

On May 7, 2009, the Board of Equalization issued a report stating that statewide commercial properties are assessed at 58% of fair market value and San Francisco commercial properties are assessed at 49% of fair market value.

In April 2009 the State Board of Equalization issued a Spilt Roll Tax Revenue Estimate:

In 2006-07, a split roll would have generated an additional $6.7 billion in revenue

In 2008-09, a split roll would have generated an additional $7.5 billion in revenue

CPR requested an interview with Brenda Yee of the Board of Equalization but did not receive a response.

An additional SF Commercial Example:

Retail on the Same Block-

o Macy’s Men’s Store (Union Square)

§ 1995 base year

§ 263,000 sq ft

§ $93,608,263 assessed value (2008 Roll Year)

§ $355 Assessed value per sq ft

versus

o Neiman-Marcus (Union Square)

§ 2006 base year

§ 252,000 sq ft

§ $192,092,520 assessed value (2008 Roll Year)

§ $761 Assessed value per sq ft

Both properties were purchased in the early 1990′s, but Neiman Marcus had new construction done to the old City of Paris department store building, triggering a reassessment.

Ting argues the law is also subject to endless manipulation by the taxpayer, which violates the basic precept of tax policy that tax laws should provide clear and known results to taxpayers.

Buyers can avoid reassessment even if 100% of a property changes hands.

Among the more egregious examples, in one transaction that took place in Napa County in 2001 where 12 shareholders of E&J Gallo Winery acquired the shares owned by approximately 20 shareholders of the Martini Winery, with the name changing and the deed changing. Since no shareholder bought over 50% no reassessment took place.

CalChamber argues that, when taxes must be increased, it prefers a broad based tax, like sales or income, rather than a “tax targeting a specific group of taxpayers,” such as commercial property owners.

Ting disagrees with the CalChamber argument.

“We have one of the highest sales taxes and highest income taxes in the country,” responded Ting. “The sales tax is the most regressive of all taxes.  It targets low to moderate income families, and the lobbyists for low to moderate income families have not been as effective as lobbyists for large corporations.”

“The assessment [of California commercial property] is no longer based on the value of the property,” admitted the San Francisco County Tax Assessor, an issue he believes only worsens over time. Ting cited several cases where the subsidies go to out of state corporations or property owners, not benefiting California at all, including one Massachusetts property owner of a Menlo Park Trader Joe’s.

Ting and his staff admit to a certain amount of frustration over decisions like that made by the BOE regarding JP Morgan, but says, “We are bound by the law.”

(This article appeared today in its entirety at: California Progress Report.)

By a vote of 68-29, the Senate passed a $17.6 billion jobs bill, HR 2847, on March 17, 2010, and the President signed it on March 18th. The bill provides payroll tax exemptions to small businesses for hiring new, formerly unemployed, workers, according to the California Institute for Federal Policy Research. It also includes a $1,000 tax credit for small businesses that keep those new workers on their payrolls for at least a year. The bill also broadens expensing provisions for small businesses, extends the Build America Bonds program, and includes an extension of the Highway Trust Fund. California is expected to receive about $278 million of the $932 million transportation funding made available under the bill.

The Senate originally passed the bill, 70-28, on Feb. 24, waiving the Pay-Go rules. But when the House passed the bill on March 4, 2010, by a vote of 217-201, it made changes to comply with Pay-Go and offset the cost of the bill, necessitating the second Senate vote, according to the California Institute for Federal Policy Research.

David Kersten recently recorded a podcast with Peter B. Collins to discuss PG&E’s Proposition 16.  To hear the podcast click here.

SACRAMENTO – Today Assembly Speaker John A. Pérez (D-Los Angeles), Senate President pro Tem Darrell Steinberg (D-Sacramento), and representatives of California Forward announced a major package of reforms to improve government effectiveness in California, stabilize state finances, increase accountability and enhance public oversight of government operations.

For the past seven months, the Legislature has engaged in a bicameral conversation about reform through the hearings of the Senate and Assembly Select Committees on Improving State Government, chaired by Senator Mark DeSaulnier (D-Concord) and Assemblymember Mike Feuer (D-Los Angeles).  Ideas discussed in the hearings were also reflected in proposals of outside groups and individuals.  The reform package announced today resulted from melding the work done by the Senate and Assembly Select Committees on Improving State Government and good-government group California Forward. 

The Legislature will amend the constitutional reforms proposed by California Forward into constitutional amendments in the Assembly and the Senate that will be vetted through the committee process in both houses. Additionally, the Legislature will undertake a series of institutional reforms to improve oversight, prioritize key issues and promote bipartisanship.

“California Forward has presented a unique opportunity to begin changing our system,” Steinberg said.  “We will fix what we can on our own and work to put constitutional change on the ballot as soon as possible.”

“As I said when I was sworn-in, this needs to be a year of real and meaningful reform,” Pérez said. “That’s why I am pleased to join my colleagues and the leadership of California Forward to advance a set of proposed solutions that help make our government more accountable and effective.”

“California’s fiscal crisis provides the Legislature with a historic opportunity to reform state government,” DeSaulnier said. “We know we can’t fix everything at once – but we must get started with changes we can make on our own along with putting the best ideas of outside groups like California Forward through the legislative process.”

“Our reform package is comprehensive, practical, and balanced.  It advances big ideas Democrats support, major changes Republican favor, and bipartisan reforms that just make sense,” said Feuer. “This is the kind of compromise that Californians rightly demand of us.”

The constitutional amendments will include the following elements of the California Forward proposal:

• Reducing the vote threshold for passing a budget to a simple majority vote.
• Raising revenues would still require a 2/3 majority vote.
• Requiring legislators to forfeit pay and per diem if a budget is not passed on time.
• Giving authority to the Governor to reduce spending in the Budget Act if the Legislature does not pass a measure to address a fiscal emergency.
• Requiring the Governor to include longer-term budget forecasts.
• Limiting the use of “one-time” revenue for one-time purposes.
• Establishing performance standards for state programs that are periodically reviewed. 
• Requiring a 2/3 vote threshold for fees that replace taxes.
• Requiring lawmakers to identify funding sources for bills that cost the state at least $25 million per year.

Legislative reforms include:

• Institutionalizing oversight of the executive branch as one of the Legislature’s most important ongoing duties.
• Requiring committee chairs to prioritize a small list of issues and report them to leadership.
• Re-invigorating the Sunset Review process to evaluate the effectiveness of boards and commissions.

Reducing by 1/3 the number of bills members may carry; allow an exception of up to 2 bills to bipartisan-authored measures.

For a comprehensive description of the constitutional amendments and institutional reforms, see the attached document.

Comprehensive description of the constitutional amendments and institutional reforms

KC Fiscal Focus has produced a brief guide that is intended to help policy makers and community members search for how American Recovery and Reinvestment Act (ARRA) funding has been used in their community. 

Specifically, this guide provides instruction on how to search the internet for ARRA funds and projects by county, search for the largest fund recipients, and search by zip codes.

To search ARRA funded projects by county click here.  To search ARRA funding by zip code, Congressional district, top recipients, and job creation statistics click here.  

The federal government has created a user-friendly website that has a variety of state and national statistics.  To visit the federal ARRA website click here. 

The State of California has also created a website that allows users to track stimulus spending by issue area, among other things.  To visit, the state recovery website click here. 

 To learn more about how ARRA provides tax relief for business, infrastructure, and individuals click here.   

###

A budget forum hosted by the Public Policy Institute of California in late January illustrated that the partisan divide over the California State budget is likely getting worse, as opposed to better, and that this year’s budget standoff promises to be at least as contentious as previous years if not more so. 

The event, titled “2010 Budget Debate,” held at the downtown Sheraton Hotel on January 28^th included a panel discussion of Republican and Democratic Legislative budget leaders, including Sen. Robert Dutton (R), vice chair of the Senate Budget Committee and future Republican minority leader, Assemblymember Jim Nielsen (R), vice chair of the Assembly Budget Committee, Sen. Denise Moreno Ducheny (D), chair of the Senate Budget Committee, and Assemblymember Noreen Evans (D), chair of the Assembly Budget Committee.  To view a tape of the event click here.    

But Democrat and Republican budget leaders appeared to reach a consensus on one issue—the deep partisan divide over the state’s structural budget gap would continue long into the future.  Towards the end of the debate when the partisan divide became more apparent, the panel was asked if the state’s structural budget gap would continue into the future–the entire panel agreed that it would but did not elaborate much. 

Republicans Advocate for Spending Cuts to Close Budget Gap, Criticize Governor for Not Making Enough Spending Cuts

“Some way, somehow, we have to get this thing to zero by cuts,” Sen. Dutton said.  Asm. Nielsen agreed adding that the Legislature should “rein in the excesses of government.”

Both Dutton and Nielsen called on the Governor to do more to help the economy by easing environmental regulations to hasten construction projects and promote growth in the private sector.

Republican leaders, Sen. Dutton and Asm. Nielsen, criticized the Governor for not going far enough in making cuts to close the budget gap.  They also criticized the Governor for supporting climate change and said it was preventing economic growth in the private sector. 

In early January the Governor released his 2010-11 budget proposal which proposes $8.5 billion in budget cuts, $4.5 billion in alternative funding and fund shifts, and $6.9 billion from the federal government to close the $20 billion budget gap projected for 2010-11.  The Governor described the cuts as “painful” and “difficult” but said he “would not raise taxes” to help close this year’s budget gap. 

Last year the budget approved by Legislature included both cuts and a series of temporary tax increases to close the budget gap, but Republicans have stepped up their anti-tax rhetoric this year, saying that additional tax increases are out of the question.

Democrats’ Oppose “All Cuts Budget”

Democratic lawmakers on the panel, Sen. Ducheny and Asm. Evans, described the Governor’s January budget proposal as an “all cuts budget” that serves to protect Republican tax cuts. 

Asm. Evans advocated for “a mixture of solutions” and that the Legislature should look at cuts, fees and tax increases as possible solutions because “recessions are temporary, but the elimination of programs is permanent,” alluding to the Governor’s proposed elimination of the CalWORKs, healthy families and In-Home Supportive Services programs.

Sen. Ducheny also questioned the Governor’s decision to unilaterally decrease state workers’ compensation by 5% by Executive Order S-01-10.  “We’ve taken down 25 restaurants here in Sacramento because of those furloughs,” Ducheny said, noting that she thought the furloughs could actually be costing the state money in lost revenues as opposed to saving money.  

Evans declared that her support for education was “the highest priority, next to jobs”, while Sen. Ducheny insisted that jobs and the economy were important but stressed that investing in education was the way to improve California’s economy.

Rocky Road Ahead

The Legislature is currently in an emergency special session on the budget and has until late February to come up with a proposal for making $6.6 billion in reductions in the current budget year to help close the $20 billion budget gap projected for 2010-11. 

The Legislative budget battle will then resume in May 2010 with the release of the Governor’s May revise.    

###

A recent public opinion poll by the Public Policy Institute of California found that the vast majority of the public lacks a very basic understanding of how the State of California raises and spends its money, however, 72% of Californians believe that they—not their political leaders—should make reform decisions at the ballot box.

To illustrate, only 16% of California residents correctly identified K-12 education as representing the area of the most state spending and 49% of all residents said the most money goes to prisons and corrections—despite the fact that prisons and corrections represents a mere 10% of the state budget, while K-12 education composes just over 40%. 

Only 28% of Californians correctly identified the personal income tax as the area representing the most revenue in the state budget, while 30% named the sales tax.  In the 2009-10 budget, the state’s personal income tax accounted for 55% of the state’s general fund revenues, followed by the sales tax at 31% and corporate tax at 10%. 

Perhaps the most shocking finding of the poll is that 72% of the public, despite their lack of a basic understanding of budget and tax issues, the public believes that they should make reform decisions at the ballot box, not the Governor and Legislature. 

The poll asked:  “And when it comes to long-term issues of reforming the state budget process, both in terms of changing the way the state taxes and spends money, which approach do you most prefer:  the Governor and Legislature should pass new laws; or the California voters should decide at the ballot box?”  Some 72% of all adults said California voters should decide at the ballot box, while only 22% said the Governor and Legislature should pass laws. 

Public’s Misunderstanding of Budget and Tax Issues Leads to Flawed Perception of Political Discourse on These Issues

The public’s lack of an understanding of these issues inevitably leads to a flawed perception of the political discourse on these issues in the media and in other public forums.  One can only speculate about the depth of the public’s lack of knowledge on other more complicated budget issues such as the causes of Legislative gridlock and impact of the 2/3 vote requirement in the Legislature to pass a budget and close even the most egregious tax loopholes.

Furthermore, when asked “how would you prefer to deal with the state’s budget gap—mostly through spending cuts, mostly through tax increases, through a mix of spending cuts and tax increases, or do you think that it is okay for the state to borrow money and run a budget deficit?”  Some 41% of adults said through a mix of spending cuts and tax increases, while 37% said mostly spending cuts, 9% said mostly tax increases and only 6% said that it was okay to borrow money and run a deficit. 

However, in two separate questions asked later 66% of adults said they would pay higher taxes for K-12 education and 82% of adults said they opposed cutting K-12 education.  If more California voters knew education composed nearly half of all state spending, as opposed to prisons, they would likely be more adverse to severe spending cuts as an option, and likely prefer for the Legislature to examine tax loophole closures or other tax increases to fund education. 

If voters knew more about the budget process it is likely that more than 51% of voters polled by PPIC would believe replacing the 2/3 vote requirement with a 55% majority vote is a good idea.  Increased education on tax issues could also increase the 13% of adults who believe the state and local tax system is fine the way it is. 

Political Leaders Need to Step Up to the Challenge  

California voters will not be likely to make responsible, informed decisions on future budget and tax-related proposals, and the leaders who advocate for them, until they acquire a basic understanding of state tax and budget issues. 

Reform advocates, including the California Teachers’ Association and Repair California, have filed a series of budget and tax ballot measures–of which at least a handful are likely to appear on the November 2010 ballot—but any successful public education campaign will take years as opposed to months to achieve significant results.      

Political leaders and advocates for reform must improve the public’s education of these issues to have any real chance of achieving meaningful reform at the ballot box—the most likely place for reform to occur given the gridlock in the Legislature.

Governor Sets Bad Example for Political Leaders

Governor Arnold Schwarzenegger has continued to obscure the magnitude of the state’s budget crisis proposing a misleading and flawed budget trigger in his January budget proposal, while calling on the federal government to help close the state’s $20 billion budget gap by providing $7 billion in additional federal spending for California.     

The Governor sets a bad example for the state’s political leaders by saying it is OK to distort the state’s budget crisis by shifting the focus to what the federal government can do, as opposed to accepting responsibility for the need to balance the state budget through realistic means.  The Governor’s actions do not honestly represent the state’s budget situation and the tough choices needed to close the $20 billion budget gap for 2010-11. 

Political leaders need to stop playing political games with the budget and instead begin a true and honest education of the public on budget issues.  Only then will voters truly understand the need for budget and tax reform and be able to make informed decisions among potential reform options.  

###