Structural deficit still haunts California

Fresno Bee ^ | 11-14-2005 | Dan Walters

[Amerigomag]

When California voters rejected, by a 3-to-2 margin, Gov. Schwarzenegger's budget- reform measure last week, it left the fiscal status quo intact — and that means that the state's deficit-ridden budget continues to gush red ink.California is still obligated by either law or political mandate to spend roughly 5% to 7% more than its revenue system can produce, even during a prosperous economy.

The Legislature's independent budget office has estimated that the state would need to spend $94 billion in 2005-06 to cover the obligations of current law, but that revenues are forecast at about $88 billion. Those numbers will change, because the state is experiencing better-than-expected revenue growth this year. Even a surge of revenues is a mixed blessing, because a law governing school finance probably will require it to spend more as it receives more. The convoluted law was a touchstone for this year's ballot measure battle.

In the short term, Schwarzenegger and legislators might produce a "balanced" budget next year by counting on improved state revenues and then using the last $3 billion of a bond issue that voters approved last year to cover budget gaps. But that wouldn't do anything about the structural deficit that haunts California as a symbol of its governmental dysfunction ... Democrats refuse major spending cuts and Republicans refuse tax increases.

[Amerigomag]

It just keeps on going ...and going ...and going.

[mmercier]

I would think if the good citizens of California want to spent 8% more than revenues they ought get their ass an income tax increase soon.

Or kiss their bond ratings goodbye...again.

[mmercier]

spent = spend

sorry.

[Brilliant]

The voters don't care if CA goes down the tubes. They are going to milk it dry, and then go home to Mexico.

[Doe Eyes]

They are almost as bad as the Federal Government. Too bad they can't just print some more money.

[Inspectorette]

Yes, and the tax PAYERS are leaving the state in droves, while the tax USERS keep coming in droves.

[Forte Runningrock]

Tax the crap out of those elite liberal hollywood actors living in those fabulous mansions. Micheal Moore made a lot of money last year. I'm sure he won't mind paying 99% of it back in taxes. How about Barbra Striesand? Tax them all! hehehe! They demand it. They are the rich after all...

[Carry_Okie]

California is still obligated by either law or political mandate to spend roughly 5% to 7% more than its revenue system can produce, even during a prosperous economy.

Let me guess just how much the debt service expense is on the $20 billion Arnold has borrowed.

[goldstategop]

Voters here love Big Government - as long as they don't have to pay too much for it. They could care less if there's a deficit. All they expect is that services and benefits get delivered on time and there'll be hell to pay if they aren't.

(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie.Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")

[kmiller1k]

Walters always makes the hit on Republicans in his column because they won't raise taxes. However, he states in this article it wouldn't matter if they did because we have "structured" in the over-spending so it would just increase the deficit. Crazy but we Californians own it.

[calcowgirl]

California is still obligated by either law or political mandate to spend roughly 5% to 7% more than its revenue system can produce, even during a prosperous economy.

Let me guess just how much the debt service expense is on the $20 billion Arnold has borrowed.

CA: State Weighs New Wave of Borrowing, Los Angeles Times, October 4, 2005:

According to the nonpartisan legislative analyst's office, the percentage of the state's budget that goes to pay off debt has reached 6%. Over the next few years even more debts will come due. By 2009, according to the analyst, paying back debt will account for nearly 7% of the state budget.  

Let me guess just how much the debt service expense is on the $20 billion Arnold has borrowed.

CA: State Weighs New Wave of Borrowing, Los Angeles Times, October 4, 2005:

[Carry_Okie]

So about half of the structural deficit belongs to Arnold.

[Eric in the Ozarks]

$380,000/year plus a free house on campus for a UC system dean. Where do I sign up for a job like this ?

[Czar]

"So about half of the structural deficit belongs to Arnold."

Before he's done, he'll own a lot more of it.

[Wiseghy]

The not so secret Legislative plan is to force a major restructuring of the tax system in CA. They simply can not fund the welfare state their interest groups want without a major increase in revenues.

First on the list will be a repeal of prop. 13, so the state can tap into all those increasing property values. Legislators in Sacramento now openly state that people want to live here no matter what the tax rates, pointing to the increasing housing values as proof of the demand.

Then, major increases on income taxes and corporate taxes will be rolled out. Gas and registration taxes are probably taboo and will be avoided unless they can be tied directly into road improvements in a way the sheeple" will believe.

They've already written off this Governor, and they will be angling for the biggest spending liberal they can find to sign the whole thing into law. It's gonna be fun. /sar.

[tubebender]

thanks for the ping...

[KungFuMaster]

In any other story, it seems that Liberal Californians have no more further obligation or inclination to stop California from being a pile of poo due to their lack of intelligence for their own well being: i. e, not paying their taxes or stopping the immigrants and drugs from getting through Mexico (maybe even Panama) from Downtown America (the Southern one).

So they're stuck no matter how many more complaints they throw at Arnold for their faults. They've become well fond of being rather like the 'Pink Elephant' as opposed to the 'Fat Donkey,' or they are, well, pretty deaf to the public.

[tubebender]

Most Californians are only concerned about today and to hell with tomorrow. They live four miles beyond their means...

[pterional]

A lot of Californians don't pay taxes. There is such a large under ground economy here in Fresno. The illegals take all the state and federal benefits, enjoy the state infrastructure and never pay a dime. If you don't pay taxes you really don't need to worry about politics.