California’s Continuing Budget Mess

  • Mercury News (reg req): Future budgets sure to fall short, state analyst says. Gov. Arnold Schwarzenegger’s plan to balance the upcoming budget would exacerbate California’s long-term mismatch between spending and income, creating a nearly $8 billion shortfall two years from now, the non-partisan legislative analyst warned Monday. The governor has “missed an opportunity in good economic times to ensure that we are moving toward fiscal stability,” said Legislative Analyst Elizabeth Hill.

  • After campaigning on a promise to make the hard choices and genuinely deal with this problem, Schwarzenegger has done exactly what Gray Davis did before him: Punt.

    Except that the current governor, unlike Davis, had the clout to actually get something done. He’s squandering the opportunity, and California will suffer as a result.

    The Legislature shares the responsibility for this ongoing debacle, because the lawmakers are the ones who’ve enacted such ridiculous budgets over the years and now refuse to face up to what they’ve done. But the one person in Sacramento who could have broken the logjam has declined. A shame.


    Posted by: on May 18, 2004 07:38 AM

    So a popular, powerful politician avoids doing the right thing because, well, it might make him unpopular.

    Gee, where have I heard this before?

    Posted by: on May 18, 2004 08:04 AM

    What do you expect Hill to say? She’s a known advocate for higher taxes.

    “The Legislature’s nonpartisan (sic) analyst, Elizabeth Hill, said in a January analysis that Schwarzenegger’s $99 billion budget proposal would leave the state with a $6 billion deficit by summer 2006. The analysis encouraged lawmakers to consider raising taxes — something opposed by Schwarzenegger.”

    Yes, the governor “missed an opportunity” to *raise taxes*. No, the Democrats won’t support any more spending cuts.

    There’s no substance here. Just ranting against a Republican by a tax & spend liberal, by a public official whose brief is to be nonpartisan!

    Posted by: on May 18, 2004 08:16 AM

    Sure, franken. Tax-and-spend=bad, borrow-and-spend=good. What spending cuts has Arnold proposed? It seems all he’s done is promise a bunch of constituency groups that if they took a cut this year, they’d get more next year. That’s not fiscal responsibility, and it’s NOT the Democrat’s fault. You can’t blame Democrats for a Republican’s budget proposal.

    Posted by: on May 18, 2004 08:18 AM

    “You can’t blame Democrats for a Republican’s budget proposal.”

    Of course you can.

    Arnold has proposed what he knows he can get, and aims to use the proposition process to get the rest. (stay tuned).

    Any other strategy would ensure that crazed Left Democrats of Sacramento would announce “it’s dead on arrival”.

    Posted by: on May 18, 2004 08:30 AM

    Just make massive cuts in CA budget. If there is no money don’t spend. If you want to spend, tax the people. It is that simple. Either the state hurts for money or they take from the people’s wallets in either income taxes, or better yet fees, raise gas, education, and other user fees. If you use services pay for them.

    Posted by: Grant Henninger on May 18, 2004 10:07 AM


    The voters are the ones to blame here. We have enacted countless laws through the initiative process that limit what the legislature can do. We have mandated spending on all sorts of things, while at the same time we have not allowed an increase in taxes to cover that spending (I’m mainly talking about Prop. 13 here.) We have enacted a three-strikes and mandatory minimum laws that have been greatly increasing our prison population, but we are unwilling to pay for new prisons.

    And we have a bigger problem than just a budget deficit, we are using up our capital goods in the state. There isn’t a city in the state that can afford to do major road work, so the roads are slowly deteriorating. Same goes for water and power and any other capital good we expect the government to take care of for us. That is an expense that nobody ever thinks of but will be far more costly in the future than financing the State’s debt. It is cheaper to maintain our capital goods than it will be to rebuild them in the future.

    If Californians want something to change with the State’s budget we need to be willing to do it at the ballot box. We need to be willing to pay for the things we want from the government or cut back what we are asking for.

    Posted by: on May 18, 2004 10:09 AM

    I think Swartznegger should raise taxes on newspapers. They are as responsible as the legislature for the budget mess. They are obvious advocates of raising taxes and write sob stories about any cut that’s proposed. So do it to them.

    I happen to believe that solving the budget problem requires a forensic examination into where changes were made to the budget after Davis took office. There was no justification for spending bubble-revenue including whatever tax cuts contributed to the problem. It doesn’t have to be reinstating the car tax but some taxes should be increased to offset its loss, less any increases in fees and taxes enacted in the interim. The rest should be done on the spending side and in making choices among competing interests, the public should know what changes exceeded the growth of revenues from the last Wilson budget to the current one. Show us the moneyÂ… and where it went.

    Posted by: on May 18, 2004 01:04 PM

    It sounds like what happened is that during the economic boom, the legislature and governor allocated all the extra tax revenue to permanent programs, instead of saving it or using it for capital improvements. So now these are line-item expenses in the annual budget with their own constituencies, who jump up and yell “You can’t balance the budget on the backs of (name of special interest group)” whenever someone proposes actually trying to balance the budget.

    I think what we really need is for people to understand that the a balanced budget means expenditures can’t exceed revenue, so either programs get cut or taxes go up (or both). This should be obvious but a lot of people seem oblivious to it.

    Posted by: on May 19, 2004 02:01 AM

    “This should be obvious but a lot of people seem oblivious to it.”

    Yes, and for a very good reason.

    It’s easier to play the “Dem vs. Rep” game than it is to work.

    Work is such a drag. Let’s call each other some more names, and hope all these awfully complicated problems will just go away.

    Posted by: on May 22, 2004 03:56 PM

    Dan unloads another raspberry. Partisan snipping thinly veiled by lousy legislative analysis — and obliviousness to factors driving real financial markets.

    Moody’s has just upgraded California!

    Three cheers for strong Republican leadership!

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