Davis Should Get Credit for Enacting Tax Relief

Re “Davis Pledges No Tax Hikes in State Speech,� Jan. 9: Every dollar of the $4.3 billion in tax relief the governor mentioned in his State of the State address was enacted during his first three years in office.

The largest of these measures is a $2.7-billion reduction in the vehicle license fee. The prior administration had enacted a reduction in the fee but made the actual reduction contingent on growth in budget reserves. Gov. Gray Davis eliminated this hurdle and increased the amount of this tax cut. Without this action, Californians would not have received this additional tax relief.

Other tax relief measures enacted during the Davis administration include: an increase in assistance for senior homeowners and renters; tax credits for teachers; a refundable child care credit; an increase in the research and development credit; an increase in health insurance deductions for the self-employed; exemptions for various agricultural items; increases for net operating losses; a long-term care credit; relief for graduate students; a credit for land donations; and credits for solar and wind energy.

All of the above, worth $4.3 billion to California taxpayers, were enacted under Davis.

Tim Gage

Director, California Department of Finance, Sacramento