Reducing State Spending

We need bold ideas to get California back on track. Steve Poizner has a comprehensive solution to create jobs and reignite California’s economy: the “10-10-10 Plan”:

1. 10% cut in personal income taxes, the state sales tax, and the corporation tax
2. 10% cut in state spending over two years
3. $10 billion Rainy-Day Fund by the end of Steve’s first term

The plan includes Steve’s proposal to cut personal income taxes, the state sales tax, and the corporation tax by 10%. His tax cut plan will also slash the capital gains tax rate in half. In addition to the tax cuts, Poizner’s 10-10-10 Plan calls for reducing state spending by 10% over the first two years of his term. He will reduce expenditures through common sense reforms and a top-down review and overhaul of every state agency, department, commission, and program. By implementing his tax reforms and spending reductions, Steve has set an overall goal of building a $10 billion Rainy Day Fund by the end of his first term in office.

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The Poizner 10-10-10 Plan:

10% Tax Cuts Create Immediate Revenue

A thorough review of personal income tax, sales tax, and business tax cuts in every state over the fifteen year period from 1993-2007 revealed that tax cuts similar in magnitude and structure to the Poizner tax cuts should generate substantial revenue shortly after enactment and only grow from there. Based on this review, the Poizner 10% cuts in personal income tax rates, the state sales tax rate, and the corporation tax rate are estimated to grow state revenues by an inflation-adjusted 1.77% in the first year and 4.94% in the second year after the cuts are enacted into law. Read the plan.

10% Reduction In Spending In Two Years

Top-Down Review and Overhaul: $3.85 Billion Total Estimated Two-Year Savings

As Governor, Steve will immediately launch a thorough, top-down review and overhaul of every state agency, department, board, and commission.

  • When Steve Poizner implemented a top-down review at the Department of Insurance, he
    permanently reduced costs by nearly 15%, while finding new efficiencies and improving
    customer service.
  • It currently costs California taxpayers nearly $26 billion a year just to operate the machinery of
    state government. Steve Poizner will permanently reduce these operating costs by streamlining
    and modernizing every state agency, department, commission, and program.

Clean Up Welfare System: $3.35 Billion Total Estimated Two-Year Savings

Steve Poizner believes that welfare should be a transitional assistance program, not a permanent way of life. He will comprehensively overhaul CalWORKs with the achievable goal of permanently reducing California’s welfare rolls to the national average. He will do this by reducing the CalWORKs lifetime limit from 5 to 2 years and making welfare recipients more accountable by enforcing and strengthening work requirements, while imposing full-family sanctions when the law is not followed.

  • California has 12% of the nation’s population, but 30% of the nation’s welfare recipients.
  • 1.2 million Californians, or 3.5% of our state’s population, is on welfare. This is almost three
    times the national average.
  • Only 22% of welfare recipients in California are meeting their work requirements. Of California
    recipients required to work in 2007, 64% didn’t work at all.
  • States that impose lifetime welfare limits of less than five years have, on average, just 0.77% of
    their populations on welfare.

Medi-Cal Reform: $1.59 Billion Total Estimated Two-Year Savings

Steve Poizner will expand Medi-Cal managed care to all California counties and transition all beneficiaries to Medi-Cal managed care, which has lowered costs and improved the quality of care provided to Medicaid beneficiaries in other states. Steve will also encourage those in the program to take greater responsibility for their own health and wellness.

The State of California spends about $18 billion a year on Medi-Cal’s 7 million beneficiaries.
Medi-Cal is the second largest source of spending out of the state’s General Fund, behind K-12
education.

Currently, just half of Medi-Cal beneficiaries are in managed care plans. The other half, which
drive over 80% of Medi-Cal spending, receive their healthcare through a wasteful and inefficient
Fee For Service program.

Overhaul Prisoner Healthcare: $1.09 Billion Total Estimated Two-Year Savings

Steve Poizner will overhaul the prison healthcare system to save taxpayer dollars and maintain prisoner healthcare at an acceptable level. He will apply the Medi-Cal standards of care and cost to the healthcare the state provides to inmates in state prisons.

  • California’s prison healthcare system is in desperate need of repair. Currently, it wastes
    taxpayer dollars and fails to provide even an acceptable standard of care.
  • California spends over $11,000 per inmate, per year, on healthcare costs alone. The typical
    state spends just over $6,000 per inmate, per year. Even with all of this spending, our state was
    furnishing prisoner healthcare that the courts deemed inadequate to meet even basic
    constitutional standards.
  • Furthermore, Poizner’s plan will save taxpayer dollars while ensuring compliance with federal
    requirements by maintaining adequate medical facilities and staffing at each state prison.

$10 Billion Rainy-Day Fund:

Combining the increased tax revenue from the Poizner 10% tax cuts with the 10% reduced state spending, Steve Poizner will create a $10 billion Rainy Day Fund by the end of his first term as Governor. Use of the Rainy Day Fund will be carefully restricted to future recessionary periods.