"I could have sworn I had another $73 billion around here somewhere," California Gov. Gavin Newsom, possibly.
$73 billion is the size of California's budget deficit this year, a deficit bigger than the annual budgets of 41 other states. It's at times like these — another is when you wake up in a location you don't recognize without your pants — that the people involved in creating the mess must ask themselves, "How the hell did that happen?"
Well, as it turns out, not even California's hardcore progressives have figured out a way to spend the same money twice. Not for lack of trying, mind you.
I've covered California's financial woes in at least one previous column [VIP link!] but this morning a telling new detail came across my desk so juicy that I have to share it.
The fact is that before finding themselves in a $73 billion hole, assemblycritters in Sacramento had so much money coming in that they barely knew how to spend it all. I'm kidding on that last point, of course. Just as quickly as California found itself with a $100 billion surplus in 2022, Newsom announced big plans on how to squander every cent of it.
Roughly half of the surplus is required by law to be spent on education. That leaves “only” roughly $49 billion in discretionary money, and the governor wants to reserve 99% of that for one-time spending: $18.1 billion to provide financial relief for Californians buffeted by inflation, plus $37 billion for infrastructure investments, including $5.6 billion for education facility upgrades, and an extra $2.3 billion for the ongoing fight against COVID-19.
What passes for "education" in California is basically Audrey II from "Little Shop of Horrors." It's an ever-growing and endlessly hungry monster shouting, "FEED ME, SEYMOUR!" And Seymour is constitutionally obligated to oblige.
But what it comes down to is that Sacramento found itself with a tidy little sum and, instead of tucking it away for a rainy day, blew it all on pet projects and vote-buying. Here's that rainy day, as the song says, but the irony is that California was seeding the clouds.
Like every other state during this country's stupid, useless, and economically suicidal COVID lockdowns, California was given oodles in federal funny money to paper over the lockdown damage done. Much of that money came from Presidentish Joe Biden's inflationary American Rescue Plan Act (ARPA) of 2021.
You'll totally believe what happened to the ARPA money, as detailed by Assemblyman Joe Patterson (R-Rocklin).
Short version: after COVID, CA borrowed tens of billions of dollars despite having record revenues, deciding not to use ARPA funds to pay it back like other states did. Now state is broke and has to pay back that money and it will do so by tripling taxes on employers. https://t.co/w7cEFLouTq
— Joe Patterson (@Patterdude) April 18, 2024
In essence, Sacramento did spend the same money twice — it's just that they put the first half on the credit card and the other half came from their rich uncle in Washington.
And that, ladies and gentlemen, is how you go from a $100 billion surplus to a $73 billion deficit in little more than a year. California's $173 billion turnaround from red to black is unprecedented in the histories of all 50 states.
But it's also just one more example of Californians getting what they voted for, good and hard — and I don't expect them to mend their ways anytime before the entire state has gone Full Detroit.
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