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Editorial: Stop the irresponsible game of political chicken in Sacramento
MediaNews via CoCoTimes ^ | 11/30/8 | Editor

Posted on 11/30/2008 8:13:09 AM PST by SmithL

California lawmakers are engaged in an irresponsible game of political chicken that risks state insolvency early next year.

With the recession deepening, revenues continue to dribble in slower than projected. If no steps are taken to alter the revenue and spending trajectories, the state will fall short by $11 billion this fiscal year and $28 billion — or more than the state spends annually on prisons and higher education combined — by the end of the 2009-10 fiscal year.

But the day of reckoning could be much sooner than that. Under current cash flow scenarios, the state will run short on money to pay its bills by perhaps as soon as March, says the governor's number-cruncher, state Finance Director Michael Genest.

"The situation is terribly serious and we need massive action on both the revenue and the spending side immediately to avoid a disastrous cash flow problem that could happen as early as the spring or by the summer," Genest told us last week.

"There is no threat that we would fail to meet our obligations to our bondholders short- or long-term. ... The threat is not to bond holders. The threat is to school districts, the threat is to vendors that do business with the state, the threat is to state employees. ... If we don't act soon, we will start to see that and we will start to see that cascade happening. If it goes very far it will be devastating."

The state must cut its spending and it must raise taxes. But the lame-duck Legislature ended its session Tuesday without making any progress. Newly elected legislators will be sworn in Monday and Gov. Arnold Schwarzenegger will immediately call the Assembly and Senate into emergency session to address the budget.

Any budget deal requires two-thirds approval of the Senate and Assembly, which allows the Republican minority to block any accord. That means everyone must cooperate. Unless our leaders start acting like grown-ups, the state will face a fiscal meltdown. There's too much finger-pointing going on and not enough action. And everyone, including the governor, is to blame.

Democratic Assembly Speaker Karen Bass's hope for a federal bailout is breathtakingly naive and her refusal to offer spending limits as part of a budget package dooms it to political failure. Republican legislators' feckless intransigence on tax increases combined with their refusal to offer up their own list of spending cuts irresponsibly places the state at risk of financial collapse. And the governor's push to link the budget talks to labor law changes muddies the waters and makes compromise more elusive.

While it was not perfect, the Democratic proposal defeated last week was a reasonable start that could serve as the starting point for negotiations. It would address $17 billion of the problem with $8.1 billion in tax increases, $8.1 billion in budget cuts and about $800 million in other solutions, such as fund transfers.

On the revenue side, it would increase the car tax from 0.65 percent back to 2 percent, where it was five years ago, which would increase the annual fee by $135 for the owner of car worth $10,000. The plan would freeze the state income tax schedule at its current rate rather than adjusting it upward for inflation as is usually done. A person making between $40,000 and $50,000 would pay an additional $79 in state income taxes on average, and someone who earns between $50,000 and $100,000 a year would pay an extra $127 on average.

As for spending reductions, the Democratic plan would cut $4 billion to public schools over two years, while aid to the poor, blind and disabled would be slashed by $600 million over that period — or about $700 per recipient each year. The proposal also would cut money for community colleges and public transit systems, while denying state welfare recipients a cost-of-living increase.

There's a lot of pain in that for everyone. And, perhaps, there are better solutions. But the GOP legislators' response of slamming any tax increases puts the onus on them to specify what more they would cut instead. Simply refusing to participate in a meaningful way is childish and unacceptable.

We have a real crisis. There is no easy way out of this mess. The longer lawmakers wait, the larger the deficit and the steeper the path back to fiscal stability. We are headed for the cliff and can only hope that our leaders apply the brakes.


TOPICS: Editorial; Government; Politics/Elections; US: California
KEYWORDS: budget; goldenstate; taxandspend; yourtaxdollarsatwork
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To: SmithL

Strange. Nearly 20 posts and no mention of the “RINO” governor. Every other CA thread blames nearly all of the states problems on “Arnold the RINO”. Its not just that California is 60/40 dem, its that the dems in CA are hardcore leftists. I for one would be thankful Arnold had the star power to get elected and at least try to hold the checkbook out of reach of these spend crazy socialists. But for some here, anything short of Tom McClintock and Duncan Hunter is a pure RINO.


21 posted on 11/30/2008 10:09:33 AM PST by douginthearmy (In the face of total electoral defeat, show some semblance of sanity.)
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To: SmithL
The public employee labor unions bankrupted California.

Sorry, but I'm not interested in paying higher taxes to fund more government jobs. I'm having a hard enough time as it is. They can go to hell.

22 posted on 11/30/2008 10:15:21 AM PST by GVnana ("I once dressed as Tina Fey for Halloween." - Sarah Palin)
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To: douginthearmy
I for one would be thankful Arnold had the star power to get elected and at least try to hold the checkbook out of reach of these spend crazy socialists.

He didn't. He crawled into bed with 'em.

23 posted on 11/30/2008 10:17:21 AM PST by Mojave (http://barackobamajokes.googlepages.com/obama_funny)
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To: SmithL
1. Eliminate benefits to illegals aliens $14 bill per year.

2. Privatize two prisons. Rinse and repeat. Long term save 2-4 billion per year.

3. Eliminate the boards every republican governor said they would eliminate.

4. Vouchers $9,000 per student. Save $3,000 per student, save a fe billion.

5. Eliminate the state capital gain tax.

6. For my second year.............. income tax cut 7. Constitutional amendment for 6 month legislative session every other year.

24 posted on 11/30/2008 10:18:19 AM PST by nufsed (Privatize 2 prisons)
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To: SmithL
As for spending reductions, the Democratic plan would cut $4 billion to public schools over two years, while aid to the poor, blind and disabled would be slashed by $600 million over that period — or about $700 per recipient each year. The proposal also would cut money for community colleges and public transit systems...

Weasel words. The author of this drek certainly understands the need to translate from politician to human. Do "cuts" = "reduction in increases", or do "cuts" = "less actual dollars this year than last year"? Without a definitive answer to that question, the author's whole whine is meaningless.

25 posted on 11/30/2008 10:19:09 AM PST by Lancey Howard
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To: Mojave
He crawled into bed with 'em.

Literally.

26 posted on 11/30/2008 10:20:05 AM PST by Lancey Howard
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To: 386wt
Property tax relief for the disabled and elderly was quietly eliminated in the October 2008 Budget vote.

Well, it's California so therefore it's Democrat-speak.... Does "elderly" mean "over 45"? Does "disabled" mean alcoholic, junkie, "twisted my back on my state job", etc., etc., etc.? Everybody who works for the state has a golden opportunity game the system and claim "disabled" and start collecting SSI and everything else.

27 posted on 11/30/2008 10:26:30 AM PST by Lancey Howard
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To: DumpsterDiver
I forgot the slash the first time
28 posted on 11/30/2008 12:51:18 PM PST by Beagle8U (FreeRepublic -- One stop shopping ....... Its the Conservative Super WalMart for news .)
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To: douginthearmy
... I for one would be thankful Arnold had the star power to get elected and at least try to hold the checkbook

Where the hell have you been living??
He hasn't done any of that.

29 posted on 11/30/2008 1:52:57 PM PST by bill1952 (McCain and the GOP were worthless)
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To: Johnstone
This is an overspending problem, not an under-taxation problem.

Why can't the politicians just state this to the people. Duh.

30 posted on 11/30/2008 2:03:48 PM PST by ncpatriot
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To: ncpatriot
Why can't the politicians just state this to the people mushrooms. Duh.
31 posted on 11/30/2008 5:47:17 PM PST by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: SmithL
Tax revenues have increased 40% since Gov Arnie “Taxinator” took office.

The real problem is that Arnie and the Democrat Congress spent every penny and then some.

LOL... Now Arnie want to give tax breaks to his mega wealthy buddies in Hollywood.

32 posted on 11/30/2008 6:24:14 PM PST by RJL
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