Flattered, but Baffled

We’re always flattered when individuals with a different point of view feel compelled to respond to one of our reports. However, Board of Equalization member Michelle Steele’s post to the Flash Report left us frankly baffled. Steele used a casino analogy and held out Arizona as a model to which California should aspire. This is puzzling since Arizona faced an even larger budget shortfall in 2010-11 than does California, relative to the size of its budget, and a study by The Pew Center on the States rated Arizona – along with California – as facing severe fiscal peril based on a six factor rating scheme.

As to the casino metaphor, Steele wrote:

“Imagine you’re in a casino and you have a choice between three poker tables. The minimum bet at all three tables is $100. At table #1, there is a 1 percent tax on every bet. At table #2, there is a .5 percent tax on every bet. At table #3 there is no tax. Which table will you sit at?”

I’m not sure about you, but I’d ask “which table offers the best chance of winning?” When it comes to our collective future as Californians, I’d argue that improving odds of coming out on top involves quality schools, investing in our children, and capitalizing on the state’s beauty and diversity to maintain a quality of life that remains the envy of the world. In a risk-reward trade, most of us would be willing to invest a little more to multiply our long-term odds of success.

Perhaps Steele’s real message is that California should follow Arizona’s lead an embrace a balanced approach to closing our budget gap. Earlier this year, Arizona voters resoundingly approved a sizeable tax increase in order to avoid even deeper cuts to critical services.

— Jean Ross

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