At the beginning of November, Sacramento's new policy of borrowing from the taxpayers (interest free, of course!) went into effect. It's technically not a tax increase, but it certainly seems like one with the chuck of your paycheck for state taxes going up 10%! Though, it only seems to translate to an extra $20-80 per month for middle class families.
But, for all practical purposes, it's a tax hike. And of course, conservatives, like my orange county neighbors, are outraged (though somewhat subdued by the prospect of getting their money back later). Of course, conservatives would favor tax and spending cuts instead.
Cuts are inconceivable at this point. With a $26 billion deficit, what is there to cut? Two-thirds of California's budget goes to education and health care. Sure, there's wasteful spending here and there than can be optimized, but even slashing those away will barely scratch the surface of the 2009-2010 budget deficit.
For clarification, let's put this into perspective. The budget deficit is $26 billion. The entire budget for the next year is $119 billion. That's over 20% of the entire year's expenditures that would have to disappear.
Now let's look at where we can get that 20%. Here's the budget for 2009-2010 according to ebudget.ca.gov:
K thru 12 Education 35,653,555
Higher Education 12,206,228
Health and Human Services 32,825,769
Corrections and Rehabilitation 8,233,620
Business, Transportation & Housing 12,546,422
Resources 5,486,619
Environmental Protection 1,784,859
State and Consumer Services 1,295,289
Labor and Workforce Development 432,724
General Government 4,179,990
Legislative, Judicial, and Executive 4,599,843
TOTAL 119,244,918
(Dollars in thousands)
Suppose you were to look at California's failing educational system, and agree that we should at least leave education intact. Keep in mind, that's 40% of the budget that's hand's off. 30% off everything else would have to go! Health Care is another 25%. We could get rid of almost all of that? Oh wait, with the millions of Californians uninsured and all the deaths because of it, that sounds like a bad idea. There's only $41 billion left in the budget, and $26 billion has to go? In other words, we'd have to cut almost everything else.
It's a nice idea to cut wasteful spending. But, in the list above, what of it is wasteful? Simply stated, California cannot proceed with spending cuts alone. The state is at the bone as it is.
There's only one other option: raising taxes. Nobody likes writing the check, but there's no other option.
Well, there's always the idea of creating new industries to tax (i.e. marijuana legalization), but that's for another discussion.
Comments
For gosh sakes man, get rid of the gov pensions and stop stealing from the average tax payer and all of the debt goes away, presto CA is saved. Come on be honest if you want to write at least tell the people the truth. It can be fixed but the unions got to go and 90% of gov jobs need to be privatized. Get rid of free health care and pensions for gov workers when they retire and it's all fixed, no more stealing from future generations. You want to fix this corrupt country, get rid of unions. If not, mark my words, the corruptest states, CA,MA,IL,NY,NJ, ect will go down hard, bankrupt cities and towns all over.
Well. I certainly agree that a lot of pensions need to go. For example, a sheriff in my area recently retired for a 6 figure pension, only to go work somewhere else for double pay. But, we are talking over 20% of our budget. And sure, coming close to disbanding the government would certainly cut costs, but at the expense of vital benefits. Privatization is not solution. When the people stop spending, the government has to (with reason, of course).
Dylan, you are a fool.
Your little shift of words... to "cutting waste" is a misdirection. Simply not hiring additional personnel is the answer. We are over staffed by 30% across the board (education included). Productivity is the answer. Necessity is the mother of invention. How about challenging (for once) people who suck the public teet to become better, greater, more ingenious. I believe they will rise to the occassion.
vital benefits? Do you mean firemen, cops, teachers? Where i live now we have a volunteer FD that does an awesome job, 90% of FD's should be volunteer, period. We don't need FD's on every corner for 1 minute fire responses, when there just are not that many house fires anymore. I can see having paid firemen in big cities but only about 10% paid, no paid firemen in towns like mine. Private cops in your own neighborhoods and some old timers would put in time for free to help out. Teachers,lol I've lived in a few states, private taught schools are almost always better, guess what, they don't get the big pensions that public schools do. It's nothing but a big ponzie scheme, just like a pyramid scheme. When growth stops, it all falls apart, just as the pension funds are doing now, they can't grow gov fast enough to cover the ones on top. I'm 50, i care about your generation and your kids gen. My boomer generation is the most greedy generation of all time. your gen needs to wake up now!
Dug, he's not a fool, he just needs to learn what the boomer generation is doing to his. His generation need to stick up for themselves and tell the corrupt unions and gov workers, i don't want my kids and grand kids paying for your retirements. Can you imagine the poor guy at walmart,or grocery store, ect has to pay for some over paid gov worker to retire at 50 or 55 at 50k and up? It's stealing, plain and simple, it's not right. It's time the younger generation wakes up and says,no more stealing from my family. I love when they say i earned that pension, hahaha, they earned it alright, they are legalized thief's nothing more. The put their union buddies in office so they can steal a little longer. It will come to a bad ending soon, ponzie schemes don't go on forever. I also think we will go deeper into a depression, it's getting much worse from here. Just wait till next year when the market heads down again, pension funds are crushed again, and states are bringing in less taxes.
Dug is right about the gov growing, it's not sustainable, down we go from here. They can't keep on printing dollars and expect other countries to buy our debt. It just started with India's gov buying 8% of the gold that was dug this year, that's why you had a big spike this week. Guess what China is next, they are trying to get away from our dollars slowly. I'll be honest, i just don't see a way out of depression, unless you cut gov, more taxes ='s less growth. Less growth ='s depression. The banks are sitting on Billions of dollars of debt,(foreclosed homes and ones people stop paying on and still living in them). There are hundreds of thousands doing it right now. When house prices fall, more people will walk away from them. This isn't even close to being over.
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