“If you look at who has been contributing to the treasury, it has changed over the years,” Nahabedian said. “More and more the treasury is supported by middle-class families and small businesses, and less and less the treasury is supported by major million-dollar companies and those who are in the very upper bracket.”
Gatto also pushed for more revenue sources, with both candidates agreeing on the premise of closing tax loopholes and instituting a new tax on oil companies.
“There’s 22 oil-producing states in the United States; 21 of them charge an oil severance tax,” Gatto said, arguing in support of a current legislative proposal to tax major oil producers operating in the state. “The only one that does not is California.”
All candidates favored exploring the state budget to identify wasteful spending, but when it came to making cuts, they offered few specifics.
Moderator Jason Wells, city editor of the News-Press, pressed the candidates on their stances for implementing a spending cap on California’s commitments for health-care and pension payments for retired state employees, an issue the candidates were split on.
Democrat Chahe Keuroghelian and Republican Sunder Ramani argued for a cap on the rising pension costs. The state’s legislative analyst has estimated that California’s retiree pension and health-care liabilities could soon exceed $130 billion.
“Maybe I’m the only one in reality land,” Ramani said after hearing two of his opponents say that pensions already promised to retired state workers should be paid.
“We don’t have the money,” he said.
But Gatto and Nahabedian argued that the Legislature needed to revise the state’s expectations for high earnings from investments, an approach they faulted for allowing the state’s large liabilities to grow.
“I know that Warren Buffett does not expect to get an 8% return year on year, yet we have this fiction in this state that we’re going to get an 8% return on our money,” Gatto said.
All the Democratic candidates argued that the state should change its current requirement for a two-thirds majority vote in the Legislature to pass a budget, saying that a simple majority is the best solution.
Ramani, who had previously said he was in favor of a simple-majority vote for approving the budget and a two-thirds majority vote for approving tax or fee increases, said the current system should not change.
“I wouldn’t mess with the two-thirds,” he said.