Posted on 07/31/2004 10:04:12 AM PDT by calif_reaganite
Mr. President:
Over the last few years, we have seen a variety of inventive ways to balance the budget on paper while racking up multi-billion deficits. So in preparation for this budget, I asked the Legislative Analyst’s Office two simple questions.
First, how much are we taking in from the revenue structure of the state – all of our taxes and fees and interest earnings?
And then I asked, how much are we actually spending for general fund programs?
In other words, how much is this family actually earning and how much is it actually spending?
And it turns out that last year, we spent $4 billion more from our general fund than we received as income.
Under this budget, according to the LAO, the revenue structure of this state will actually generate – in round numbers -- $76 billion. And it will spend $81 billion on general fund programs. We’ll “earn” $76 billion and spend $81 billion. The deficit – nearly $5 billion – will have to be borrowed.
And that assumes every budget assumption works perfectly.
In our last budget debate, one senator said, “that’s OK. Borrowed money is real money.”
If you believe that, try this one out on your spouse – “Honey, we spent $5 billion more than we earned last year, but don’t worry – I just put the difference on our charge card.” I wish you better luck with that one than I know I would have with my wife.
We’re told, “at least this is a step in the right direction.” No it’s not – it’s a $5 billion step in the wrong direction.
Let me put it another way. Over the next year, inflation and population will grow at a combined rate of 4.2 percent. Our revenues will grow 6.7 percent. So, this is still NOT a revenue problem. Revenues continue to grow faster than inflation and population combined. But here is the problem -- spending will grow 7.4 percent. That’s a faster annual growth rate than under the previous administration’s 7 percent. Our annual spending is actually growing faster now than it has over the past five years.
The widening gap between revenues and expenditures continues to be papered over with borrowed money.
Less than three months ago, on May 1st, the total amount of state general fund supported debt (this includes all the bond issues) was $33 billion. By the end of this budget year, that debt will have grown to nearly $51 billion. That is a 54 percent increase in debt in a mere 14 months. Borrowing by this state is now completely out of control.
Here is what we have:
That is the budget we are about to vote on. “Never mind that,” we’re told, “the budget doesn’t raise taxes” – or, at least, it doesn’t raise them by much.
But here’s the fine point of it: resistance to tax increases only works IF IT IS ACCOMPANIED BY RESISTANCE TO SPENDING INCREASES.
As I have repeatedly warned – YOU CANNOT PAY FOR SOCIALLY LIBERAL PROGRAMS WITH FISCALLY CONSERVATIVE POLICIES. You cannot be both things. IT DOESN’T BALANCE. Fiscal conservatism means not only restraining taxes but restraining spending.
“Never mind that,” we are told. “We’ll control spending increases sometime in the future.” This is a song we hear with every budget – like we hear “Jingle Bells” at Christmastime. Let me remind you that successful diets don’t start in the future. They ALWAYS begin in the present.
And here’s the problem with the future diet that we are promised. This budget also obligates us to make enormous balloon payments beginning in 2006. Not only are we spending more than we can afford this year, but we are agreeing to even bigger obligations just 24 months from now. We will have balloon payments due to local governments, to the pension system, to the public schools, to the universities. Some diet.
Last year when we took up the budget (a budget that we also were told was “balanced”), I warned that it was “a rotting porch just waiting to collapse.” We ended up spending $4 billion more than we took in. This year – if all goes well – we will spend $5 billion more. The porch is gone. Now the very financial structure of our house is being eaten away.
Forty years ago, in 1964, when California admirably met the needs of its people, it spent $202 per person from both general and special funds. That’s $1,160 adjusting for inflation. $1,160. You are about to vote on a budget that spends $2,878 per person. And let me ask you – where are the roads, where are the aqueducts, where are the power plants, where are the top-flight schools and universities that our parents delivered 40 years ago?
What will be our generation’s answer to history? “Sorry, it’s the best we could do?” Shakespeare’s words come to mind: “Age, thou art shamed. Rome, thou hast lost the breed of noble bloods.”
Aren't you a sweetheart?
And no, I don't think you make Conservatives look COMPLETELY deranged.
The further you are removed from influence, the sooner that will occur. Keep bitching, amidst your foolish tantrums and counter-productive capers Arnold has saved billions of taxpayer dollars because of the upgraded credit rating he's secured.
Sorry, it's August 2 of the most important election year in our lifetime. The benefit of doubt is hitherto suspended. You Arnold jihadists have no clue how to improve your situation. Freepers of integrity need to start acknowledging that there is a profound and discernable difference between rank stupidity and rare inspiration.
Your 'facts' are lacking and your personal attacks are unbecoming. Good day.
The budget passed in a veto-proof 28-11 vote.
Governor Schwarzanegger has no obligation to make a gesture of spectacular failure, even if it makes anonymous internet "calcowgirls" all flush and gooey.
>>The budget passed in a veto-proof 28-11 vote.
And 24 of the 28 were Dems... 10 of the 11 were Republicans.
I notice who you have aligned yourself with... the Dems.
It was apparent, but this makes it crystal clear. Thank you.
Again... I will not dignify the personal insults with a response.
I see from your "In Forum" previous posts that you are singularly obsessed with sliming Schwarzenegger. Do you post on ANY other subject? You McClintock cultists need a mass intervention, and subsequent institutionalization.
You really need to stop with the ad hominem attacks. That's what the loonies over at DU excel at. Or have you run out of substantive arguments?
He is not very conversant in California politics and especially the current subject: the FY2004/2005 budget.
Republican Party shills come and go frequently on our topic. Their hallmarks are ignorance of the details of the subject and repeated personal attacks.
Who are you a retread of? Mojo?
McClintock bump.
I guess I was clueless then as to how bad it could get!!!
Well the article on the national budget was touting the fact that the budget was small in relation to GDP. I was just wondering how the state stands up. These are the important numbers and we seem to be missing them.
Last I heard, we'd dropped back to 6th largest, well before the Recall.
California Fast Facts- $1.4 Trillion Gross State Product
- Fifth largest economy in the world
- Largest state economy in the U.S.
- State's economy is 13% of GDP
commerce.ca.gov/state/ttca/ttca_homepage.jsp
Stop the importing of poverty.
Make the feds deport the illegal aliens.
Not all but some of the cost will be aleviated.
Ok this is a start. What percentage is the budget and more importantly how does it relate to previous years? We need someone who is better at crunching numbers than I.
Just divide the 104 Billion Dollar Budget by 1.4 Trillion Dollar Economy. However, those numbers are obsolete. We've shunk and fallen behing FRANCE!!! The thing to find out is if France squanders the equivalent of 104 Billion dollars on Socialistic Social Engineering and EnvironMentalism, turning the Revenue Stream into the Waste Stream like CA's legislators have been doing!!!
I'm not sure where you're trying to go with this, FF. About the only thing you can determine conclusively (after crunching numbers) is if the relationship is increasing or decreasing over time. Without even crunching the numbers, I would bet they the budget is increasing as a percentage of GSP. Comparison of State percentages relative to Federal percentages aren't meaningful, as the nature of the expenses are much different (e.g. States have no national defense expenditures) and GSP is derived differently than GDP with respect to inclusion/exclusion of government employees.
I'm an old number cruncher from way back.... but what are you trying to demonstrate?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.