(Washington, D.C.) - On behalf of its more than 165,000 California members and supporters, the Council for Citizens Against Government Waste (CCAGW) today urged California’s assemblymen and senators to oppose Gov. Gray Davis’s plan to raise taxes to pay for a $23.6 billion budget deficit.

“Before any consideration is given to penalizing Californians by raising a penny of taxes, every possible effort should be made to reduce wasteful spending,” CCAGW President Tom Schatz said.  “The state of California now spends a greater portion of personal income than at any time in its history.  In fact, while California’s population grew only 5 percent over the last three years, general fund spending grew 36 percent.”

“There are plenty of examples of waste, such as the scandalous no-bid contract between the California Department of Information Technology and Oracle that will end up costing the state an extra $41 million.  The contract is now being investigated by the California attorney general and the U.S. attorney is determining whether a criminal investigation is warranted,” Schatz added.

According to the California Taxpayers’ Association, waste and mismanagement of California’s tax dollars already funds poetry readings for which the Resources Agency spent $12,000, excessive overtime expenses for state prison correctional officers which totaled $160 million in 2000, and hundreds of suspected cases of fraud against the state’s Medi-Cal health care program that may have cost taxpayers as much as $1 billion.

“The governor’s proposal to raise California’s cigarette excise tax rate by 50 cents per pack is estimated to bring in only an additional $475 million in revenue, an amount that would cover less than 2 percent of the deficit.  Even that amount will be elusive,” Schatz also said.  “A 50-cent increase in cigarette taxes could result in the loss of almost 11,000 jobs, creating the need for additional state assistance.  In addition, taxable cigarette sales will be lost due to increased cross-border and Internet sales and illegal smuggling.”

According to a recent Copley News Service report, since California more than doubled its tobacco tax in 1998, it is estimated that the underground, Internet and mail-order trade for cigarettes may exceed $500 million per year, resulting in the state losing about $200 million a year in projected tax revenue.  An additional tax increase will only exacerbate this situation.

“The real solution to California’s budget deficit is clear: reduce wasteful spending, do not raise taxes,” Schatz concluded.

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.