State spending cap. Setting our budget priorities. Stop spending more than we earn.

SFC ^ | Oct. 13, 2005 | Tom Campbell

[FairOpinion]

Because we haven't been living within our means, we've spent more than we have taken in each of the last six years. We've tapped out our state credit card, raided funds intended for schools and roads, and now bump along with the worst bond-rating of the 50 states, which costs us hundreds of millions of dollars in extra interest every year. The tired, defeatist answer is: Just raise taxes. But we've spent more than we have received in taxes every year for the last six years. Why do we expect the Legislature wouldn't do so again?

There is a better way. Prop. 76 requires that state expenditures grow more smoothly. Rather than allowing a one-time spike in income to add to permanent-spending formulas, Prop. 76 specifies that the state can only increase its spending over the previous fiscal year by a percentage equal to the previous three years' revenue growth. We're still paying for having put our spending into high-gear based on one-time money at the end of the 1990s. This will stop that. If we have a windfall one year, the extra revenue will go into a reserve to be available for use when a year of exceptionally low revenue occurs.

Prop. 76 walls off the "special funds" that have routinely been raided when the state was spending more than it had. The sales tax we pay on gasoline, for instance, was intended for road building and maintenance; instead, it's been regularly raided for the state's general fund. That would stop.

[Czar]

"If you want to side with the Democrats on wanting to destroy CA, fine, but stop pretending that it's a conservative position."

Well, I guess there must be something to that old adage, "If you cannot frame a persuasive argument, then attack your opponents."

It may or may not be a conservative position, but it certainly is my position.

Since you now appear to be in the ad hominem attack mode, shall I assume you have nothing further to offer in the way of pro-#76 material?

[NormsRevenge]

I would say it speaks to the core of your modud operandi, just deny past actions and hope for better down the road, in a blind leap of faith.

typical of a liberal pie in the sky mentality.

you never answer what is asked of you anyway so no surprise.

[goldstategop]

Not all debt obligations are bad. Debt that goes to infrastructure and maintainance is a good debt because its a one time expenditure that improves the quality of life for every one. They are services we all depend on. No one wants to cut those. Bad debt is debt that goes to entitlement programs that benefit qualified recipients. Only those eligible for those programs receive them. Its a bad debt because the debt is on-going. They are not as popular as debt in category #1. Quick guess on which debt the State Legislature has increased the fastest relative to population and which it has refused to cut. So now you know not all forms of spending are equal. Sure, it would be best to avoid formulas altogether but in a state with irresponsible politicians a set of guidelines can at least point them in a certain direction. Of course there is no guarantee they will go there and that is the biggest problem with Prop. 76 - not its formula. Things may be tidy and neat on paper but you can't predict in advance human nature.

(Denny Crane: "I like nature. Don't talk to me about the environment".)

[calcowgirl]

>>I read somewhere that if both 78 & 79 pass, the one with the higher # of votes would take effect. Is that true? I am asking because you appear to have done much more research than I have.

Yes. That is true. Most polls have shown that Prop 78 and 79 did not have the support required to Pass. Prop 78 is outspending Prop 79 by a factor about of 5:1. (about $80 million to $16 million, last time I looked). The Prop 78 campaign is not so much selling their initiative as they are trashing Prop 79 (a good thing!). The only hope of Prop 78 passing, (IMO), is if people are led to believe that they have to CHOOSE between the two. They don't!

While the CA GOP is backing Prop 78 and it was part of Arnold's original reform agenda that he announced in January (SB 19, Ortiz-D), it is just another social subsidy program--I hope that folks will be smart enough to vote NO on both.

[calcowgirl]

>>That merely tries to substitute a huge quantity of nonsense, for a short, reasoned argument, facts and logic.

Please clarify. What is "nonsense"?
(Please cite specifics, rationale, and sources.)

[BamaGirl]

Thanks calcowgirl!

Ok, because I read somewhere on FR that we, in fact, do need to choose, and should vote yes on 78 and no on 79. That way, even if they both pass, 78 hopefully gets more votes and takes effect.

And then there is a clause in 78 that lets the private companies opt of for any reason. This they plan to do.

Apparently it's a big strategery by those "big evil drug companies" to defeat 79 and also save face. 78's only reason for existing was to defeat 79.


If you can find the time to tell me how this is wrong, I'd appreciate it.

[Amerigomag]

Arnold is the one who is pushing for spending cuts.

Unbelievable. I'm amazed the party operatives can reach their keyboards as their noses get longer and longer.

Schwarzenegger is the person who has not only approved the big spending increases but he is also the person who proposed them.

Schwarzenegger isn't solving California's fiscal problems, he isn't blazing a trail to their solution, he's simply mortgaging our children's future as he connives (Prop 76) to borrow more and more money so that he can propose and approve more and more spending. If he can't borrow he has indicated he'll increase taxes.A cut in California's budget never crossed Schwarzenegger's mind. Not once.

[goldstategop]

There's a difference between restraining spending and creating yet more entitlement programs. We don't need a state drug prescription program that adds more on-going costs and we sure as heck don't need Soviet style regulation of our utilities that eliminates the free market and prevents consumers from shopping around for utilities that offer fair prices and good services. So vote NO on 78, 79 and 80.

(Denny Crane: "I like nature. Don't talk to me about the environment".)

[calcowgirl]

Debt that goes to infrastructure and maintainance is a good debt...

Debt for infrastructure is okay, assuming you can afford it. The state is already at its debt limit. ("By 2009, according to the analyst, paying back debt will account for nearly 7% of the state budget.")

Debt for maintenance is not good. Maintenance is a non-capital item and should not be funded as an asset with value, unless it improves such asset through extending its life or increasing its value. Maintenance is an expense that should be funded out of recurring revenues.

Of course there is no guarantee they will go there and that is the biggest problem with Prop. 76 - not its formula.

There are many problems with the Proposition. I didn't try to put them in order of import.

[goldstategop]

And if the entitlement formulas remain unchanged, all that simply happens is we pay higher taxes later. Some "reform."

(Denny Crane: "I like nature. Don't talk to me about the environment".)

[goldstategop]

We can afford it. I think we all know the importance of safe roads, secure water, and clean air. And all of these things require building roads, dams and installing pollution control equipment. And they have to be maintained so our quality of life doesn't suffer. What we can't afford is debt that just takes money from one group of people to give to another. We can cut that debt to avoid mortgaging the state's future. So unless we eliminate the current entitlement formulas not even Prop. 76 will change things as fast as people expect. And its not going to restrain spending for a couple of years anyway because of the way the formulas are calculated. Whether it will act as a brake in lean revenue years, no one really knows.

(Denny Crane: "I like nature. Don't talk to me about the environment".)

[FairOpinion]

"Schwarzenegger is the person who has not only approved the big spending increases but he is also the person who proposed them."


===

Care to provide some FACTS supporting your allegations?

[Amerigomag]

And its not going to restrain spending for a couple of years anyway because of the way the formulas are calculated.

These "formulas" only apply to a portion of the state budget. There are many areas were services can be drastically cut to offset the "formulas". State employment can be substantially reduced and entitlements can be eliminated or reduced to federal minimums while the "formulas" are adjusted.

If Schwarzenegger and the legislature continue to insist, to the tune of $40B this budget year alone, that California tax payers continue to house, feed, educate, medicate and incarcerate Mexico's poor then something has got to give. The plan is unsustainable.

[calcowgirl]

What you are repeating is the "campaign speak" of the pro-Proposition 78 crowd. Fair Opinion has posted it before here on FR (see here and here).

Because Proposition 78 flies in the face of Republican principles (or at least the principles of the party I joined years ago), they are trying to make it appear that this is only a defensive measure. If that were true, why did Arnold launch this last January in the legislature? Fair Opinion told us in the above linked post that Prop 78 was submitted in response to Prop 79 (i.e. after). It wasn't. Prop 78 was submitted to the Attorney General on January 18th (pdf file). Prop 79 was submitted on February 4th (pdf file).

If too many Republicans just follow the recommendations of folks like Fair Opinion and the GOP leaders endorsing this crappola, instead of voting on the principles of republican party, we will end up with another social program. Unless there is strong evidence that Prop 79 will pass, one shouldn't even consider voting for 78. (As "evidence", I don't mean the bogus Survey USA poll that has been spammed on these threads).

[Amerigomag]

Because we haven't been living within our means, we've spent more than we have taken in each of the last six years. We've tapped out our state credit card, raided funds intended for schools and roads, and now bump along with the worst bond-rating of the 50 states, which costs us hundreds of millions of dollars in extra interest every year.

Speaks volumes, don't you think? And direct from the horses mouth. I appreciate the Republican Party would like to ignore Schwarzenegger's leadership in this charade (2nd sentence) but it can't.

The irony of the Republican Party's contribution to our continuing fiscal problems isn't lost on all. Just a few.

[calex59]

Thanks for posting the info on Prop 76. I have been wondering about that one. Now I know.

[goldstategop]

And more of the same.... I can't help but think people don't want to deal with it because its going to be the next generation's problem. If we pay extra interest who cares? I'll be six feet under by the time the bill finally comes due.

(Denny Crane: "I like nature. Don't talk to me about the environment".)

[Amerigomag]

Unless there is strong evidence that Prop 79 will pass, one shouldn't even consider voting for 78.

California doesn't need either proposal, even in reasonable economic times, and no evidence is needed to simply vote NO on both.

It is comes as no surprise that both proposition were sure losers until the Republican Party got involved and started a drumbeat that the party faithful HAD to choose between the two.

[FairOpinion]

"Because we haven't been living within our means, we've spent more than we have taken in each of the last six years."

====

Are you claiming Arnold was governor for the PAST SIX YEARS?

[SierraWasp]

"While some may trust the current administration to not raise taxes, one has to acknowledge the shift in power and ask if it would be an improvement if a Democrat were in office."

This CA Citizen wants "a government of laws, rather than of men," or should we say Governors Only!!!

There are some tempting features in this measure under the current circumstances, but our CA constitution has already become such an abortion as a "living, breathing document" that it reads like nothing more than all the rest of the mish-mash of muddied laws on the books.

We need to not only "live within our means," we need to live within our constitution and stop treating it like a damn punching bag!!! Like the Federal constitution, the legislature should not be able to futz with it all by theirselves and even the people should not be able to change it so frivilously without some kind of super-majority vote, IMO!!!

Whipping the "law of the land" from pillar to post at each election, and especially at "special elections" is to not take "a government of laws, rather than of men," seriously!!! We used to be a representative republic, remember???