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California Budget Circus Part 23
The year was 1987. Ronald Reagan was President, Pac Man and Ms. Pac Man were tops at the video arcade, Michael Jackson was only slightly odd and NASA launched the Buck Rogers on the last of America’s deep space probes (well maybe not that last one).
However one other thing that happened that year was the California legislature failed to pass a budget on time and they have repeated that failure every single year since. For the last 22 years they have missed the deadline and in a matter of hours they will do so for the 23rd year.
This year of course the problem is even deeper because of the massive deficit which may amount to as much as 25% of the overall budget. That kind of debt is going to be very difficult to clear without lots of bad decisions, ranging from tax hikes to spending cuts. One thing we do not need is politics, but that looks ot be what we are going to get (again).
On the left, sites like Daily Kos and Left Coaster are, as usual, calling for little or no spending cuts, instead urging that the debt be cleared by ‘taxing the rich’. Given the current level of debt that would probably require raising the tax rate on some to as close to 100% as possible. They also urge getting rid of Proposition 13, which limits property taxes, though given the collapse in real estate prices I seriously doubt how much extra income they would get from such a deal.
On the right, sites like Red State and Polipundit are, as usual, calling for ‘spending cuts’ and ‘getting rid of the illegals who caused the debt’. Again, the level of debt is such that solving the problem entirely through spending cuts would require pretty much eliminating everything except schools and jails. Most analysts suggest that illegal immigrants cost perhaps $ 5 billion in extra spending. Even if you double that to $ 10 billion its still going to leave a pretty big chunk of the current $ 25-40 billion debt (depending on whose numbers you accept).
Oddly enough while both sides are overboard in wanting only their solution to be adopted, both sides have a point when it comes to what needs to be done. We need BOTH spending cuts and tax increases if we are going to get out of this mess.
Certainly working to resolve the issue of illegals is something that has to be done, and it would be nice if the demagogues on both sides could tone things down a little bit. Probably it will involve some mix of amnesty and deportations, and it certainly won’t solve everything but it will help.
We also need to make sensible tax hikes. I don’t like the prospect of increased taxes any more than the rest of you do, but reality is reality. Obviously here we need to try and minimize the negative impact of tax hikes (IE driving people and businesses out of the state) but something needs to be done.
Similarly we will need to make some hard choices on the spending side. Some areas, including the normally untouchable education budget, will have to take cuts that will hurt. But our first goal should be to try and make cuts where waste is still present. Union employees will have to accept that salary and benefits may need to be cut in order to spread the pain around.
Needless to say all of the above is easier said than done and it is reasonable to say that most politicans have the backbone of a jellyfish, so I don’t know that they will even try. The only thing I do know is if we aren’t to the point of no return yet, we’re getting pretty darn close.
14 Responses to “California Budget Circus Part 23”
The problem with increased revenue is that California will spend it twice. One of the problems is that California fails to consider the ratchet effect. In the good times, they start increasing spending and in the bad times, they want to raise taxes. Those on Dailykos want to complain about referendums but in 2006 they were excited when California started spending money on stem cells. I wonder how many jobs have been created with that permanent spending initiative? In addition, there are numerous indirect costs of illegal immigration such as the out migration of the middle class.
I can't get on board with the illegal immigrant pogrom, and prop 13 is as desperately needed as ever. I'm not generally a fan of rent control, and prop 13 is essentially rent control for homeowners, but given the abandon with which the Left spends other people's money, it seems some such brake is needed.
But the brake could be loosened a bit. Property assessments should drift enough to meet the market over time, and prop 13 should never have applied to commercial property. We should fix that, but in exchange do other things to make the state more business-friendly.
And we should certainly reform our initiative system and our fundamentally broken financial decision-making process. It currently takes a majority vote to mandate new spending and a 2/3 vote to authorize new funding. If we just reversed that, we'd have surpluses from now till the end of time.
Yes, the California circus. With Ringleader and drama queen Schwarzaneggar presiding over the troop of clowns in Sacramento.
I say they put their six and seven figure incomes where their mouths are, stop their caviar and cocaine parties and shunt that money into keeping some potholes filled. I know, I tend to wander into bizarre fantasies sometimes…
When was the last time the Lotto was audited by an independant citizen revue board?
What? Did I say something wrong?…lol…
Well, yes, “independent” has an “e”, three in fact. And a “revue” is a show.
I actually wish our leaders in Sacramento spent a little more time partying together. In the old days politicians would fight like hell during the week and golf together on the weekends. I have to imagine that led to a more collaborative relationship.
Hey Patrick,
You've made some excellent points here; California may be the Garden of Eden, but is financially a disaster on roller skates.
But you say:
“Union employees will have to accept that salary and benefits may need to be cut in order to spread the pain around.”
What about about management?
Incredibly poor management (and personal greed) are more of a problem in this country than working people being paid a fair wage and receiving decent benefits.
What part about THAT do you not think is a problem?
I think we could generate revenue by sueing our state's insurer, if any.
If Schwarzenegger can't see the damage and costs of these illegal aliens, maybe you need a revolt out there. Illegal aliens are making American a breeding ground for their illegal alien children, and the American taxpayers are paying for every damn one of them.
Then we're forced to educate them and give them free health care along with their parents (parent). Then how many are in public housing like obama's aunt? How much is it costing to jail the illegal aliens, then deport them, when they shouldn't be here in the first place.
It's time for ZERO TOLERENCE with these illegal aliens. It's time we get these illegal aliens back to their own country where they belong. They don't belong here and we don't want them here!
NO AMNESTY! NO AMNESTY! NO AMNESTY!
ENFORCE THE LAW!
lol you are nuts
“California will spend it twice”
I (a California native) don't miss this. It's gotten ever more crowded, expensive, and dysfunctional there. Sacramento's “Massachusetts Lite” behavior has long been notorious. How long before they expect and demand a bailout (it's a Democratic-run state, after all) from a federal government that currently also sees no limits to what they want to spend, and are looking to spent vast amounts more? Lessons from the Golden State in past years aren't learned, lessons from New York City (which bankrupted itself through liberal politics and policies and vast spending) aren't learned, and Washington currently is doing the same thing as California. [sigh]
California — Too Big (A Government) to Succeed. Lesson for Washington, DC, if it would ever learn…
“prop 13 is as desperately needed”
No, just fair, reasonable taxes (restricted to such) for all. Longer-term residents don't have the right to live as welfare recipients off others who arrive in the state later and pay most people's taxes, not only their own proper share. As I've said for years, there's no reason to rely on assessed valuation for the purpose of levying property taxes. An objective measure such as square footage of land area of parcels, and of the structures built on the parcels, is superior as well as obviously inherently more fair and just. Why it's not done is an open question, though the lust for excessive taxes and manipulation of markets and lives is the obvious answer.
“If Schwarzenegger can't see the damage and costs of these illegal aliens, maybe you need a revolt out there.”
If the revolt results in new laws being passed, the scum of society will misuse the courts to try to get the laws overturned and the will of the people and their morality subverted. This is, of course, nothing new.
“Those on Dailykos [...] in 2006 they were excited when California started spending money on stem cells.”
The children throughout the nation currently have moved for now from this to “green jobs,” which to them is an even bigger, more long-lasting, more magical instant solution to everything including the common cold. It's not only going to be the object of obscession with a few state governments, but also of many a misspender in Washington.
“Spending money”: And how much did California's state spending leap upward during the stock bubble?
Of course cutting social programs isn't going to benefit because it will essentially create a class warfare where the poor will just get poorer and they won't be able to get off the streets. If taxes increase it should be luxury tax. Or the legalization of marijuana.
http://www.newsy.com/videos/california_s_collapse_whose_problem_is_it
Yes, hard choices are what we are going to have to make to get out of this financial mess. We all have to tighten our belts somehow and learn to make do with whatever we have. Regarding the illegals, I don't know how they contributed 5 to 10 billion dollars to the debt since they are not covered by any health insurance or by anything the rest us in terms of benefits enjoy..
Evelyn Guzman
http://www.debtchallenges.com (If you want to visit, just click but if it doesn’t work, copy and paste it onto your browser.)