Skip to comments.CA: Here We Go Again (Assemblyman Ray Haynes on budget crisis)
Posted on 04/10/2006 4:52:31 PM PDT by calcowgirl
Term limits is calling an end to my legislative career, so this may be my last budget discussion. I thought this might be a good time to give a sort of retrospective of my budget discussions over the years, much like they do when a television show is coming to an end. So here are the highlights.
1997. My first budget article. Government is growing too fast. Governor Pete Wilson has proposed growing state government from $49 billion general fund to $53 billion in the 97-98 budget. After several years of difficult times, the state is starting to see surpluses. Tax cuts and pay-as-you-go infrastructure spending should be considered.
1998. Once again, I complained that state government was growing too fast. The 1998-99 budget has increased from $53 billion to $57 billion. We have a Republican governor. We are supposed to be for small government, and we are growing government. Perhaps, we should hire fewer bureaucrats, and put our money into tax cuts and a pay-as-you-go infrastructure program. A reduction in the car tax should also be considered. (Ultimately Governor Wilson accepted the car tax cut idea, and it became law.)
1999. Gray Davis is Governor. He grows state government from $57 to $66 billion. We are seeing record surpluses now ($8 billion this year), but not one dime to new tax cuts or infrastructure spending. Governor Davis does, however, propose pork projects throughout the state to buy votes. Republicans will buy into the pork and the spending (they did).
2000. Spending is completely out of control. State government has grown from $57 billion to $79 billion under Governor Gray Davis two short years in office. Record surpluses have grown into record government growth. Since 1997, government has grown by $30 billion under both Republicans and Democrats. We need to pull the car tax trigger and consider pay-as-you-go again. The state is on the brink of a disaster.
2001. The movie, The Perfect Storm had just come out. Like the Andrea Gail in that movie, the state is sailing into an impending disaster from which there is no escape. Last year, we could have avoided it. This year we cannot. The collapse is inevitable. No one escaped unscathed. Ultimately, of course, the state recalled Gray Davis, mainly because of his mishandling of the budget, resulting in an unlawful increase of the car tax in 2003. Legislative Democrats saw their budget priorities flounder in the sea of red ink they had created. Arnold Schwarzenegger is elected Governor, and in his first budget in 2004-05, he proposes the smallest increase in state government in 30 years, an increase of $100 million. I actually voted for that budget.
2002. We are now in the midst of the crisis I predicted the year before. Gray Davis seems oblivious to the size of the problem. Legislative Democrats are bent on raising taxes. The problem is growing, and, much like the energy crisis of the year before, Sacramento is fiddling while the rest of the state is burning.
As you can tell, I have written this history for a reason. In my opinion, we are in the same place today as we were in 1999-2000. In the budget year most recently concluded, that is 2004-05, total state spending was $79.5 billion. By the end of June of 2006, total state spending is projected to be $90.1 billion, and Governor Schwarzeneggers 2006-07 budget proposes spending $97.9 billion.
Compare this to the revenue figures in those same budgets. 2004-05 saw $82.2 billion received in revenue, leaving the state with a $2.5 billion surplus at year end. 2005-06 will see $87.9 in revenue, which will spend the surplus from last year. 2006-07 will see $91.5 billion in revenue, leaving the state with a $6.4 billion deficit, which will eat up the remaining reserves of the state.
In other words, we are on the brink of another disaster. Building a $6.4 billion operating deficit into the budget in our states salad days of the last two years is exactly the same thing that Gray Davis did in 1999-2000 and 2000-01. If the economy slows at all, the resulting crash will be even worse than 2001-02 and 02-03 for two reasons: (1) the state still has $15 billion in debt to repay from the 01-04 budget years; and (2) this budget disaster will be the Republicans fault, because the Republican Governor, just like his Democrat predecessor before him, failed to exercise adult supervision over the Legislative Democrats kindergarten spending antics in the Legislature.
This is only part of the problem. In addition to the spending patterns set by the 2006-07 budget, which build in a $6 billion operating deficit, the health and pension obligations of the state to its retirement program are undergoing a revamp. According to the Legislative Analysts Office, the new accounting standards, when they are implemented will show that the generous benefits granted to state employees in the Davis years will come back to haunt state taxpayers. In retiree health benefits alone, the current retirement program is $40 to $70 billion under-funded. It will take at least another $6 billion a year in taxpayer money to pay this massive debt off. That means right now, without more revenue, the state is looking at a $12 billion deficit.
And this is in the midst of record increase in revenue, from $71 billion to $91 billion in just four short years. If the state cannot balance its budget in times of plenty, when can we?
The solution is to cut taxes, shrink government, control government spending, eliminate bureaucrats, and move to a pay-as-you-go infrastructure program. But I said that before, again and again and again.
Term limits have determined that my time in the Legislature is over. Next year, I will not be in a Senate or Assembly Republican caucus to caution my colleagues about the dangers of government spending. I will be on the Board of Equalization trying to protect taxpayers from the rapacious legislators whose appetite for your money is insatiable. Maybe then I can do some real good for the taxpayers of this state.
The writer represents the 66th Assembly District, which includes portions of western Riverside County and northern San Diego County.
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")