LETTER SENT in SUPPORT OF AB 2106

August 26, 2004

The Honorable Arnold Schwarzenegger
Governor of California
State Capitol Building
Sacramento, CA 95814

Re: AB 2106 (Ridley-Thomas)--Request Signature

Dear Governor Schwarzenegger:

The League of Women Voters of California respectfully requests that you sign AB 2106 (Ridley-Thomas), a bill that 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.

The League has long advocated mandatory regular review and justification of tax expenditures by the Legislature. 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.

Tax incentives tend to be offered with rosy predictions of the benefits they will produce, but with scant evidence to support those predictions. They are then most often left in place without any real review as to whether they have, in fact, had the promised results. As California faces ongoing budget constraints, a careful examination of tax expenditure programs is an essential tool in the effort to make government more efficient, effective, and accountable. It is important to evaluate the performance of all government programs, both expenditure programs and tax incentives, when budget makers are considering cuts in important public services or increases in the rate of taxation.

AB 2106 lays the groundwork for a process that would include further study and evaluation of selected tax expenditures and require the budget committees in each house to evaluate their priority compared to all regular state expenditures. We pledge to support Assemblymember Ridley-Thomas as he proposes legislative rules to implement such a process in the next session.

We believe it is critical that tax breaks be carefully reviewed as part of the budget process and believe enactment of AB 2106 is an important step toward that end. We urge you to sign this measure.

Sincerely,

Jacqueline Jacobberger
President, League of Women Voters of California

cc: Assemblymember Mark Ridley-Thomas