Posted on 04/13/2006 9:14:53 PM PDT by NormsRevenge
Mr. President:
Let me begin by placing these bonds in perspective, and since Pat Browns administration is being looked back upon with nostalgia by politicians in both parties, lets compare his program to the one now before us.
We all agree that from 1959 to 1967, Pat Brown presided over the most breathtaking period of public works construction in Californias history.
During those years, we built the finest highway system in the world, one of the largest water projects in history, and the foremost university system in the country. At a time when the population grew twice as fast as today, we kept pace with the demand for schools, ports, prisons, libraries, parks and power plants.
Now, for a reality check.
In all eight years combined, Pat Brown borrowed the equivalent in modern, inflation-adjusted dollars of $20 billion in general obligation bonds. The proposal now before us is to borrow nearly $50 billion.
Again, in 2006 inflation adjusted figures, Pat Brown spent less than $1,500 per capita in his final year in office. Today we are spending well above $3,000 per capita.
When Pat Brown finished this remarkable era of public works, our entire debt service ratio was just 2.2 percent. Today, it is 5.9 percent.
In his last year in office, the inflation-adjusted general fund deficit was less than $700 million. Ours is nearly $6 billion.
In past years, we had the highest credit rating in the nation. Today, we have the lowest in the nation.
So here we face a fiscal paradox. Despite record borrowing, we have nothing to show for it. And despite record spending, we cant seem to scrape together enough money to build a decent road system or educate our kids or protect our families from predators.
Why?
Its because our generation abandoned three simple principles of sound finance that our Governors from Earl Warren through Ronald Reagan practiced religiously, and allowed them to create this cornucopia of public works with a fraction of the borrowing that is contemplated tonight.
First, bonds should only be used for projects that will be around a generation from now, when our children are still paying off the debt. Brown borrowed for lasting works like university buildings and state hospitals. Our generation has squandered long term bonds to pay for day-to-day operating expenses, deferred maintenance and equipment that is obsolete long before the debt is repaid.
This measure continues this folly. Much of the borrowing before us tonight is for maintenance, equipment and ongoing expenses that will be obsolete long before the debt is paid off. I have news for you: our children are going to have their own potholes to fill and their own weeds to pull without paying to fill potholes and pull weeds 30 years in the past.
Second, state bonds should be used only for projects that benefit the entire state. Projects that exclusively benefit local communities should be paid for exclusively by those communities. This measure doles out a grab bag of local pork projects, literally robbing Piedmont to pay Pomona.
Third, when a project provides an exclusive and direct benefit to a distinct group of users, it should be paid for by those users not general taxpayers.
Highway users should pay for highways and mass transit users should pay for mass transit. We Californians already pay the fourth heaviest tax per gallon of gasoline in the country, but we rank 49th of the 50 states on per capita highway spending. That is NOT a revenue problem it is a priority problem.
And remember, the State Water Project was financed not by general taxpayers, but by the purchasers of the water and electricity that this project made possible.
Bonds are seductive. They promise immediate gratification but they conceal a heavy price. They are certainly the most expensive way to finance projects, costing two dollars to retire every dollar of debt. Moreover, the states borrowing capacity is finite, requiring careful attention to priorities, since debt once issued cannot be rescinded only repaid. And every dollar borrowed by this generation reduces the ability of the next generation to meet its own needs.
Pat Brown understood this. Our generation has not. And here is the ultimate test: does anyone here pretend for an instant that this massively larger bond measure 2 ½ times the inflation-adjusted size of all eight years of Pat Browns administration will begin to match the public works built by the Pat Brown administration?
For a fleeting moment, we have the chance to join the generation of giants that produced the state highway system, the state water project and the state university system. Instead, with this tragic measure, we would take ranks with the generation of spendthrifts that has already racked up unprecedented debt with practically nothing to show for it.
Senator Tom McClintock today issued the following statement concerning the Governor's budget proposal for 2006-2007
http://republican.sen.ca.gov/web/mcclintock/article_detail.asp?PID=304
Senator Tom McClintock
Date: January 10, 2006
Publication Type: Press Release Print Version
Senator Tom McClintock today issued the following statement concerning the Governors budget proposal for 2006-2007:
Today the Governor released his budget proposal for the 2006-2007 fiscal year.
It projects general fund spending of $97.9 billion with income of $91.5 billion, for a general fund operating deficit of $6.4 billion. This brings the accumulated three year operating deficit to $9.8 billion.
This deficit is funded entirely with borrowed funds from Proposition 57, approved by voters in 2004. Although the public was promised that this bond would only be used to pay for past deficits, it is in fact being used to cover deficits for 2004 ($0.6 billion), 2005 ($2.9 billion) and now 2006 ($6.4 billion).
In November, the Legislative Analyst projected that if nothing were done to rein in spending, the 2006 budget would consume $95.1 billion. The governor proposes spending $2.8 billion above this figure.
In the last three years, combined population and inflation will have grown 16 percent; revenues 19 percent; spending 25 percent. For the budget year, combined population and inflation will increase 4 percent; revenues 5 percent; spending 9 percent. Revenues continue to outpace inflation and population; spending continues to outpace revenues.
I have always applied two fundamental tests to a budget: it must be balanced within existing revenues and it must contain a prudent reserve. The proposal as submitted to the legislature fails both tests.
PING!
McClintock Ping List.
Please freepmail me if you want on or off this list
Could have had steak, but we settled for Hollywood ground down.
How does this guy keep getting reelected? He makes too much sense for most Californians.
Double Dittos to that...
Ping
Tom is always that single beam of sunlight that makes its way through the dark clouds of selfish socialism. The crowds raise their heads for a minute and listen but do not hear; then they simply bend back over and reinsert their heads where the sun don't shine.
Sure like your new tagline, too!!!
Just changing with the times. ;-)
BTTT!
As bad as that $50 billion is, they make no bones about the fact that they intend to try to float $200+ billion in bonds before they're done.
The state is barely making it now. How in the sam hell do they think they can service those bonds?
Are they trying to go belly up or does it just come naturally?
BTTT
what in the . . . .They never learn.
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