Here we are a full month into the ’08-’09 fiscal year, late again. I’ve been in the Assembly 5 2/3 years and have seen some opportunities come and go, to reform the budget process. My first year was the Davis Recall Budget year, 2003, when the voters said enough and made a change [that word did exist before the 2008 presidential cycle] and removed a governor.
One thing that has not changed, through the highs and lows of the economy since then has been the lack of discipline by the legislature on spending. Some stats say revenue has gone up 40% in the last few years. But at the same time spending has gone up 44%. In the meantime, even with all that new revenue, we are facing a deficit of $17 billion.
It’s not the fault of hardworking Californians not paying enough taxes, it’s the unabated spending. When the top 1% income earners ["the wealthiest Californians" is what the pro-taxers call them just before they seek to fleece them again] already pay about 40% of the entire tax load, then it’s not that they aren’t paying their "fair share" either.
So we have record revenue and even more record spending. Yet we hear from the Dem side that "It’s a revenue problem, [read: not enough taxes], not a spending problem." [read: we are not overspending our means] The results are the same, not enough dollars to match all the big ideas to spend it. To paraphrase when someone wastes excess food on their plate, the legislatures eyes are bigger than it’s checkbook. Spending peak revenues on an ongoing basis, as if they will remain at that peak indefinitely is a sure recipe for budget disaster as we see occuring now.
It’s as if the legislature gets a big inheritance from a rich uncle and adjusts its lifestyle upward to match…except the money runs out and so does the supply of rich uncles. The warnings have been issued, time and again, "control spending", "rainy day fund" yet the show rolls on.
Isn’t it enough to observe Hollywood or sports stars, that when their popularity or physical ability wanes, the big salaries and bonuses stop. But many still continue to live large until it’s all gone and then are ridiculed on the tabloids you see at the supermarket checkout stand. They don’t put anything aside for when their star fades or the record hits stop coming. Or when their 8 years in pro sports are over and they have little to get by on once the Hummers and Porsches are repossessed, as they spend the rest of life with knees that are shot.
Yet the legislature wishes to continue to spend like a rap star even when the hits are over and our "posse" has moved on. What will it take to fix our fiscal mess? The proposal to create a spending cap, adjustable for inflation, is the only way to exert the discipline that the legislature needs to stay within its means. Plus a rainy day fund is desperately needed, one that can only be tapped for backfilling the inevitable downturn in revenue from fluctating economies. This heads off the need for cuts that no one wants to make such as MediCal reimbursements to health providers or the temptatation to steal from highway funds or local government to fill a state budget gap. Or on the other side of the coin, the drumbeat for new job killing taxes to make up for a budget shortfall.
The fiscal situation isn’t the only crisis that needs immediate attention. Next to nothing has been done to address water supply nor the long term levee bolstering that ensures delivery of water south of the Delta to 25 million Californians. [Well, we will have some dandy new flood maps and lovely new habitat for fish and bugs soon] Our transportation and highway system, which is the workhorse of our economy still needs much help. One good earthquake can knock out any of this infrastructure. An earthquake not a whole lot stronger than in L.A. the other day can cripple the Delta with collapsed levees, making water delivery to those same 25 million people and valley crops impossible…at least you wouldn’t want the water then as it would now be salt water backfilling from the Bay. Not to mention the damaged levees leaving places like Sacramento at risk of billions of dollars of flood damage.
Imagine, then trying to deliver water by truck in Los Angeles while the water system is out. That’s if the water mains are not broken, or freeways aren’t collapsed from continued earthquakes. Or if there are still trucks enough operating in this state after new CARB regulations due in October have chased out every truck not brand new or missing required smog equipment not yet tested or invented yet.
Getting the budget process on some kind of sensible and disciplined track certainly doesn’t fix all of this over night. But with the amount of dollars that all this will take, with the already existing mountain of debt we face, we must start here and now. I don’t see us putting any "excess" revenue into a rainy day fund real soon, but we need to have that discipline ready and available for when we do see our economy and revenues bounce back. The spending limit will help turn that tide sooner. But we need Constitutional limitations to achieve these tools.
Left to its own devices, the legislature won’t make it happen. In my five plus years, I’ve seen that the legislature does not, nor will not have the discipline to control its own spending. We need the people of California to place that discipline upon their legislature by the strength of a Constitutional change to how budget spending is done. We can’t keep doing this, relying on gimmicks or have the mighty state of California resorting to lining up for essentially Check-Into-Cash payday anticipation loans. The silver lining to this crisis will hopefully be the realization that this type of change must and will be done for the future of our great state and it’s people.