Longtime FR friend and Reason Foundation Vice President Adrian Moore sent this over…
Gov. Arnold Schwarzenegger is warning that the state’s budget deficit will reach $21.3 billion and the state will face a “cash crisis” if voters don’t approve the budget measures on next week’s ballot. So the massive $42 billion deficit hasn’t been a crisis all along?
The governor’s promotion of these ballot measures is just the latest example of his failure to live up to his promises. Wasn’t he going to blow up the boxes of government? And cut up the state’s credit cards?
The ballot measures are simply tax increases and accounting gimmicks that will do nothing but put a short-lived band-aid on the state’s massive deficit, while creating the conditions for an even worse crisis in coming years.
A recent Reason Foundation study showed that since former Gov. George Deukmejian’s final budget in Fiscal Year 1990-91, state spending-including the General Fund, special funds, and bond funds-has skyrocketed 181 percent. Spending nearly tripled from $51 billion in FY 1990-91 to $144 billion in FY 2008-09.
Politicians often blame falling revenues for California’s budget woes, but state revenues jumped 167 percent between 1990 and 2008. In FY 1990-91, the state took in over $38 billion in General Fund revenues. By FY 2008-09 revenues were $102 billion. If California had simply limited its spending increases to the 4.38 percent average increase in the state’s consumer price index and population growth each year since FY 1990-91, the state would be sitting on a $15 billion surplus right now.
Spending has grown more under Gov. Schwarzenegger than it did even under Gov. Gray Davis, rising 6.75 percent a year. To try to cover those spending increases, Schwarzenegger has raised taxes. The Sacramento Bee’s Dan Weintraub aptly wrote, “Schwarzenegger is proposing to raise taxes on coffee, cars, gas, lunches and, yes, even toilets and mattresses.”
There’s nothing that won’t be taxed by this state government. This new Reason.tv video looks at how Schwarzenegger has failed to live up to his promises and how unions destroyed the Terminator. And, even scarier, at how Congress and President Obama are taking Schwarzenegger’s budget practices nationwide.
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