California: Cap spending, put surplus in reserve

The Orange County Register ^ | Sunday, June 30, 2002 | Esmael Adibi Director, Anderson Center for Economic Research Chapman University

[Ernest_at_the_Beach]

Does history repeat itself? It surely does when it comes to the state government's budgeting process. Since World War II, the national economy has experienced 10 recessions varying in length and severity. As expected, during these recessions, the state's receipts (taxes and fees) fell short of spending plans and crises developed. Programs needed to be cut, hiring freezes were instituted and in almost every cycle some taxes or fees were raised. During the years following the recession, not surprisingly, government receipts outpaced spending targets and at least for a few years surpluses were generated.

[Ernest_at_the_Beach]

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[Carry_Okie]

We did that in California through Reagan, Deukmejian, and Wilson. Every time we elected a Slave Party governor they have blown the dough and left a hole. Then a recession hits and we have to come in and force-feed the painful medicine. Once things start to get better people get fat dumb and happy and the Rats make a comeback. They get to look good on the float for a couple of years and here we are.

[John Jorsett]

It's nice to say this, but just asking for this sort of discipline from the governor and legislature is futile. If we want it to happen, it'll have to be embodied in an initiative and put into the state constitution.

[patton]

Exactly. CA needs a constitional amendment to limit government spending and collections to, say, 6% of GSP.

But anybody pushing tis idea better be careful, and include the words "from any source." Or the RATS will claim that the lotto, the extortion of smokers, park fees, and what not are not really revenue.

[NormsRevenge]

Obviously, there are fundamental flaws in our budget decision-making process. If these flaws are not corrected the same kind of costly cycles will continue in the future.
DUMP DAVI$ & the Den of Socialists



GO SIMON

[First_Salute]

Bump.

[VOA]

We did that in California through Reagan, Deukmejian, and Wilson. Every time we
elected a Slave Party governor they have blown the dough and left a hole.

You have nailed it.

Simon should be working with some ad agencies to find the most pointed slogan along the lines
"Davis For Governor -
More Deficits, More Taxes, More, More, More"

[Chairman Fred]

"Slave Party".

Most accurate name for the RATS yet.

[Carry_Okie]

The Slave Party: They always were and they still are. The only difference is that now they acquire majority by indentured constituency.

There's another one for you.

[DennisR]

I am assuming GSP means "Gross State Product"? If so, how much is GSP in CA?

[patton]

Two key comprehensive indicators that measure the overall performance of the state economy are the gross state product
(GSP) and total state personal income. In 1989, before the 1990-91 recession, GSP was $743.5 billion; personal income,
$606.7 billion. In 2000, before the 2002 recession year, GSP was $1.341 trillion; personal income, $1.093 trillion.

[DennisR]

Okay, thanks.

I gave this idea some thought a few months and have even put together a "position paper" on it. But I think we need a limit on collection, not spending. My idea was to limit tax collection to 4.5 percent of what I call "gross cumulative income" (GCI). The State (in my case WA) would not be able to collect more than 4.5 percent of the total income of the citizens. If the GCI goes down, then government collection has to follow. However, it could never go above 4.5 percent no matter what. The State could use various methods to collect taxes, but limiting the amount of money government could collect would stop the nickel-and-diming it does to us today. And they could never spend more than they collect.

[patton]

False assumtion - what is to stop the state from deficit spending? Or are you including that?

[DennisR]

Good question. If it was up to me, I would make a law that forbid government from deficit spending. Period. So they would actually have to save some money and be responsible ("conservative") with tax money. The way it is now, there is absolutely no responsibility or repercussions for bad management of state money.