Apparently we are getting closer on agreement of a fix for the massive state budget shortfall. From what I hear, the deal does not include tax or fee increases, which is great news. That needs to be the first priority for budget negotiators as California taxpayers already are carrying too much of a burden with their current obligations to state government.
That said, I am wondering whether or not Sacramento politicians are tightening the proverbial belt enough. I recognize that trying to deal with a shortfall of over $26 billion is not an easy task. Especially for Sacramento Democrats who are either union-controlled and don’t have the latitude to make many needed cuts, or are liberal ideologues who would rather push California to the brink than see a decline in redistributive wealth policies.
The reason that I say this is that from talking to sources and reading newspaper reports, it would appear that borrowing and gimmicks will make up billions of dollars of “solutions” for this crisis. Current negotiations call for borrowing billions of dollars from local governments – which is a terrible idea (if raising taxes is the worst alternative, borrowing money is right behind it). My sources also tell me that gimmicks like moving the last state payroll of the fiscal year from June 30 to July 1st are still in play.
If we want to avoid being right back in this same spot year after year, budget negotiators need to be looking to three areas. First would be permanent cuts – the ones that once made, mean we don’t need be talking about these again in the next budget. The second would be long-term reforms, such as the pension system changes recommended by Governor Schwarzenegger. Finally, we need to stop looking to gimmicks and accounting tricks that “kick the can” into the future.
At the end of the day, it will take a two-thirds vote of each legislative chamber to make the changes negotiated in the “Big 5” discussions. While I do spend some time talking to Democrat legislators, I spend a lot more time with the Republicans. I do not sense that there are many Republican legislators that are inclined to vote to raid local government coffers, let alone go on the record supporting gimmicks that ignore the real (overspending) problem.
I want to continue to offer encouragement and support to Governor Schwarzenegger, Senate Republican Leader Hollingsworth and Assembly Republican Leader Blakeslee. In addition, I want to recognize that the level of cuts that are necessary to balance the state’s books make this budget negotiation very difficult for Democrats Steinberg and Bass. We all get that. But at the end of the day, the amount of money coming into state government is what it is. And despite counsel to the otherwise by budget “guru” Noreen Evans, Capitol politicians do need to live within the available means (money). The more honest and real the cuts are in this deal, the more quickly we’ll be able to move out of “scramble” mode and really look to long term solutions for our state’s fiscal woes.
P.S. Just to throw a controversial idea out there, how about repealing the temporary increases in the sales, income and car taxes that were enacted this last February? That would encourage economic growth, and result, ultimately in more, not less income to state government.
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