The financial challenges facing state government in California are very real. We already have a structural deficit of billions. Add to that the new commitment to repay, with interest, all of the new bonds being issued (to add to the payments on those already issued) and the looming issue of dealing with unfunded pension liabilities to the tune of billions of dollars more, and you have a big challenge on your hands. But wait, there’s more! Let’s also remember that the size and scope of California state government keeps expanding, and that we have been kind of (if you don’t count deficit spending) keeping pace with obligations (ok, you have to count deficit spending, so we really haven’t kept up). But this has been with the economy humming along in great shape. In other words, we are one economic downturn away from a disastrous financial situation in Sacramento.
Of course, the stage is set for a showdown because while the Governor has made it clear that he has set a table for himself, Fabian Nunez and Don Perata, to see how to expand more government programs (a.k.a… "bi-partisan, party of one"), he is also significantly committed to opposing any proposals to raise taxes on Californians (a major cornerstone of his re-election campaign). At some point, the increased levels of state spending are going to plow into limited resources and then you have a big problem on your hands.
Today, Sacramento Bee columnist Dan Walters pens a great piece looking at this whole situation. It is featured on the main page and I recommend that you read it.
This all becomes important because the Governor has already said that he wants to make healthcare a major issue as he returns to Sacramento for a second term. First and foremost, this is a major challenge because much of our country’s healthcare woes are due to poor national policies, largely stemming from too much government intervention. Only with help from the government can you have a bizarre third-payer system where those receiving the care never see a bill.
Yes, there are things that we can do to help — not the least of which would be to give Californians who put away money for medical expenses a break on their taxes. But some are saying that the Governor is going to embrace a proposal to redistribute tax dollars from some Californians to pay for the healthcare costs of other Californians. This is a recipe for disaster, in addition to being morally and ethically wrong. Today, Sally Pipes, President of the Pacific Research Institute, has a column on our main page on this very issue.
Have a great day, and remember that saying, "A government that is big enough to give you everything you want, is big enough to take away everything you have."
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