Can Californians Get Thrifty?

Sacramento legislators and Gov. Arnold Schwarzenegger are behaving as if the main problems now facing the state government -- a possible deficit of $40 billion over the next year and half -- are the result of some unforeseen and unfathomable circumstance. No one can figure out a palatable solution, while both parties spend their time pointing fingers at each other.

Certainly, the economy has fallen rather suddenly, but did state officials expect the growth to go on forever? Were there no plans in place for the proverbial rainy day? At the local and county levels, officials are in near hysteria, warning about cutbacks in "vital" services if someone doesn't bail them out as sales and property taxes plummet. But I never heard a peep from any municipal official in the past nine years as budgets were flush with record revenues. Nope, officials at state, county, and local levels were too busy spending all the cash.

Although 40 billion is a number far bigger than what most of us can imagine, and there is no easy solution given all the political obstacles that stand in the way of the obvious ones (spend less, cut government), there is nothing particularly complicated here. The California Republican Party put together a handy chart. In fiscal year 2000-2001, the state received $88 billion in tax revenues and spent $96 billion. In fiscal year 2008-2009, the state received nearly $130 billion in revenue and spent $141 billion. That estimate was made early in December, and the projected annual deficit has expanded by several billion dollars since that time.

California politicians have a severe spending problem. Public employees are extremely powerful in the Capitol, and their salary and benefit packages are constantly increased. The Democratic majority is committed to nothing less than finding new ways to shake more cash out of California's already overtaxed individuals and businesses. The basic viewpoint from California Democrats is that this state is so wonderful (and it is a pretty wonderful place) that taxpayers aren't going to go anywhere, even as out-migration of U.S.-born citizens continues from California to locales with far less wonderful weather and scenery, such as Nevada.

Republicans -- not counting the barely Republican governor, who has embraced tax-increasing as a potential solution to the problem -- have been solid on budget issues, but they aren't blameless. There's nothing the California GOP likes better than "law and order," which is one of the few issues that they can successfully run on. So GOP politicians constantly introduce new prison-building programs, tougher laws, third strikes, and enhanced pay and benefits for police, and the ever-expanding categories of "public safety."