Posted on 12/26/2004 9:27:27 AM PST by NormsRevenge
Financial gimmicks don't fix a state budget, and often cost the state more in the long run. That's true of borrowing money to pay the state's pension obligations, which got Gray Davis into trouble and is now embarrassing Arnold Schwarzenegger.
The Pacific Legal Foundation this month filed a lawsuit challenging the governor's plan to sell $929 million in bonds to cover the state's pension costs this year. A similar lawsuit last year derailed Davis' plans to borrow $2 billion to meet pension obligations.
The lawsuit isn't frivolous. The state Constitution prohibits the government from borrowing more than $300,000 without voters' approval. Exceptions are allowed only "in case of war to repel invasion or suppress insurrection."
Evading politically tough budget choices just doesn't qualify.
Schwarzenegger claims his plan is constitutional because the reforms it offers would save the state $3 billion over 20 years, enough to pay off the bonds without creating debt for the general fund.
Perhaps, but there's a lot of wishful thinking behind that formula. Under the governor's plan, new state employees would not participate in the state pension system for two years, instead contributing to a savings account. That would save the state millions in matching payments.
After two years, though, employees could cash out that money or use it to buy into the state pension system, after which the state would have to make up the two years of matching payments. So the savings would depend on how many new state employees leave their jobs within two years, and how many who stay decline to join a generous state pension plan. Counting on people to act against their own interests hardly seems like a winning strategy.
Neither does borrowing to pay operational expenses, which is what Schwarzenegger's proposal does, no matter how it's cloaked as reform. It's another in a long line of fiscal subterfuges used to avoid addressing the root cause of California's budget troubles: The state spends more than it takes in.
Schwarzenegger ran for office vowing to end the state's tradition of budget gimmickry, so his pension-borrowing scheme is a disappointment. But he can redeem that mistake next year by proposing a state budget based on fiscal realism, not on stale tricks and unfounded optimism.
Again I say we need to take CA's statehood away from them and make them back into a territory!
Isn't it obvious that the billions we are forced to spend on illegal aliens every year have something to do with our state being in such serious debt?
We need to have a state run by liberal nutcases in order to judge the performance of the other states. CA performs that function.
The unfortunate point, though, is that Schwarzenegger is taking the State down, and he's also embarrassing the Republican party. It's important to remember that even though Schwarzenegger is a Republican, his policies are liberal, and that is the crux of the problem in CA.
Hey - let's take out another credit card and postpone repayment of the current debt for 100 years. The politicians would love it - why worry about tomorrow? They live for today.
Territory?!? Nah bad idea as we'd still be responsible for the reprobates. Let's just give it BACK to Spain - Or Mexico, or ANY country for that matter that'll take it, even France.
That freaking state with it's IDIOTIC laws and regulations effect the whole USA1- so the hell with 'em. Let's kick them out of the USA.
1 - One ijit CA law I read about a year ago might likely put Briggs & Stratton OUT of business.
No need. Just deed us to Mexico. It's happening anyway, illegal by illegal, so the U.S. ought to just acknowledge reality and get it over with.
This is incorrect. The root cause of California's budget troubles is that it spends more than it should. Increasing taxes would not solve Kalifornia's problems.
The billions we spend on illegal aliens are mandated but not funded by the federal government. If the federal government demands we pick up the tab for its policies, then the federal government can darn well send back some of the tax money it collects from Californians to pay the bill.
The only chump is him. He wants to succeed? Appeal 187 and enforce it.
Oh, please, PLEASE, don't do that! As the fifth largest economy in the world, I'm sure that Mexico, France, or Spain would love to have us. Californians provide the federal government with 25% of taxes collected, far more than the state gets back in federal programs. We have sent more of our men and women to Iraq, and suffered more casualties than any other state. So, no, you are not responsible for us reprobates; in fact, we reprobates are responsible for you. Now stop biting the hand that feeds you.
No chit, senor... do ya THINK??? (bewildered grin)
Hay snopercod... This artickle quotes you favorite part of CA's abortion of a constitution! You know... The part that Liberal Repellicans and Leftist Demonicrats just hate!!!
Merry Christmas and a Happy New Year Waspman.
Instead, he's acting like a smoke and mirrors governor, a marginal improvement over Gray Davis.
That's not a high bar.
Arnold doesn't have the stomach for it.
With either bad advice, or impetuous inclinations, or even worse... Nievete' can cause one to transform from hero to goat overnight here in CA!
And the bigger bullshifter they are... The harder they fall!!!
Yes... He's just about squandered all his meaningful political capital with which to right the biggest of all the Democrap wrongs! Spending!!! Mad, Socialistic Spending!!!
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