Skip to comments.California Budget Out Of Control - California on a union-led course to bankruptcy…
Posted on 04/24/2006 4:28:50 PM PDT by NormsRevenge
I have refrained from commenting on Californias budget because it is still uncertain exactly what is going to happen in this years budget debate. This, however, is what we know up to this point in time.
Last year, the Legislature approved, and the Governor signed, a budget that increased state spending by $11 billion.
The government employee unions complained that it wasnt enough. This year, the Governor proposed a budget that increased spending by an additional $7 billion.
The government employee unions are complaining that it is not enough.
The Governors budget spends $6 billion more than projected revenue.
The government employee unions complain that it isnt enough.
In 1999, then-Governor Gray Davis proposed increasing spending by $9 billion. That was the largest spending increase in the history of the state of California, until 2000, when Gray Davis increased spending by $12 billion.
Last years spending increase was the second largest in Californias history. This years proposed increase is the same as the one in Davis first term. Unfortunately, Governor Schwarzenegger looks like he is making the same mistakes as Gray Davis. The only problem with his strategy is that if the budget collapses like it did during the Davis years, then the resulting budget deficit will be the Republicans fault. In 1999-2001, Republicans could rightfully complain that the states budget woes were entirely Democrats fault. If Schwarzeneggers plan is fully implemented, Republicans will lose that argument. Schwarzeneggers spending plan is at least as bad as the spending plans proposed by Gray Davis, and, in my opinion, will lead to the same bad outcome if the economy should slow down (as it inevitably will).
The good news is that the Assembly Republicans have decided to say no to Schwarzenegger. Schwarzenegger said he wants to spend $7 billion more than the state receives in revenue. The Assembly Republicans said no, the state should only spend what it takes in.
Schwarzenegger said he wants to expand government as fast as Gray Davis. The Assembly Republicans said no, they want to slow down the growth of government.
The Schwarzenegger budget did not resolve the states debt issues, particularly the $15 billion debt that Gray Davis created. The Assembly Republicans said they want to make sure that debt is paid, before we spend another dime in new state programs.
The Schwarzenegger budget does not seek to resolve the growing government pension problem. The states Legislative Analyst Office recently reported that the state is facing a $40 to $70 billion problem because it has not funded state retiree health benefits adequately. According to the LAO, it will take $6 billion a year to adequately fund these former state employee benefits. Assembly Republicans say the state budget must resolve this impending crisis.
The good news is that when the state goes bankrupt, I wont be in the Legislature. The bad news is that the state will go bankrupt if it continues to follow this course. But if the Governor listens to Assembly Republicans, he will avoid bankruptcy. The government employee unions will continue to complain. Who will the Governor listen to, Assembly Republicans or the unions? Only time will tell.
They must fire 1 out of every 4 state employees or their pensions will take the whole state down. Mid level no bodies make $130K plus bonuses plus 66% at retirement. Its worse than anyone knows.
Arnold tried, Unions lied, the balanced budget died.
Norm, we are doooooooooomed.
Seriously, considering how politicians cook the books I am surprised that the house of cards (wobbly though it may be) still stands.
bump for publicity
Well if I thought it would do any good and the stupid California politicians would learn from it I would say.....just bankrupt Calif and get it over with.
But the stupid politicians here would just say we didn't do enough. They think they can spend their way out of bankruptcy.
Mr. Haynes is one of the few sane voices in Sacto. and he is leaving.
As for Ray, think 2010.. we're pretty much screwed here in the near-term, regardless who is in office.
Anyone know what this is all about?
Yep, unions connected to the government/tax dollars should be prohibited from making more money or getting more benefits than the average wage in the private sector.
The Senate Parking coordinator makes $110,000 a year. She told me directly that they only have 3 or 4 vacated spots a month to assign, hence her work load.
The RATs in the California Legislature have a plan - wait for the election of another RAT and then rescind Prop 13 (thereby quadrupling property taxes), double the state income tax and raise the sales tax to 25% - there, that ought to fix the problem!
(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.")
Bet she gets 4-6 weeks off vacation plus 20 days they dont need to show up...its a crime actually.
True story they did a sting on SF Muni employees. The day they came to audit, the supervisor shows up in a trench coat, slippers, and underneath he had his pj's on. He clocked in and went home while they stared in awe. Then they went out back and found 4 employees sitting in a car drinking beer..in the morning....TRUE STORY.
Where do I sign up for that job? My college doesn't offer courses in Parking Coordination :-(
Are you sure it wasn't casual friday?
But now he is just another RINO politician. He should have refused to run for a second term, denounced the unions once more in the most forcful terms, and gone back to making movies. In 10 years when this all blows up Californians would be begging him to fix things. Now, as the article points out, he has been co-opted and will likely take the blame for the future blow out. Similar to what Bush has done on the Federal level. True partisans might wish that Hillary gets the top job in '08, just in time for the big POP! of the energy/real estate/ currency bubble. No matter what the media say, it will be her issue is she's in the seat when the music stops. And stop it will, in both California and Washington.
Anyone who stayed awak in Economics 101 cvouda tolja so.
Governor Swartzeneger tried to set things right but the socialists who control the voters shot him down.
the real problem is that a sovereign state cannot go bankruptcy. Guess who will pay?
Perhaps I need to update my rhyme thusly...
"Arnold tried, Unions lied, the balanced budget died,.........
...and Arnold caved to the left side."
politicians come and go but their debt lingers on forever.
I hope they go bankrupt soon.
You can't fix something like California without it first hitting rock bottom.
Arnold talked, unions balked, and so he walked...to the dark side.
Meet the new boss--same as the old boss. :-(
They can't go bankrupt, but they will end up defaulting on their bonds.
It didn't help that he let the dems off the hook by borrowing 15 billion..
It had an undesired effect as you mentioned at the polling places last November, a couple worthy initiatives got tossed with a few stinkers as well. The blame can be spread around for that.
If it wasn't for all my family over there, I would hope for the 8.0 quake. I lived there almost all my life and I am sickened by the way they have destroyed that beautiful state.
I thank God that I left when I did.
The R.W.Ratikal account obviously has no knowledge of California's recent economics. The question becomes why offer an opinion that is divorced from reality?
FYI. Since taking office the Austrian has proposed and approved record breaking spending package after spending package for the state. Spending well in excess of income. He has borrowed billions to continue the spending. He has suggested no cuts in spending. Only increases.
Schwarzenegger's only opponents are elected Republicans in the Assembly and Senate. Since taking office Schwatzeneggger has employed extra-constitutional maneuvers to disenfranchise these Republicans from the budgeting process. Many elected Republicans are bitter and wish that Schwarzenegger would cease and desist his shenanigans.
No, R.W.Ratikal, Schwarzenegger has not tried. Just the opposite. He is part of the problem and not part of the solution. The sooner that Californians can remove the Austrian Pretender from office and conservatives can drive the Wilsonegger gang from the CRP the better the state and the CRP will be.
I too wish a lot more folks had sucked it up and at least voted a partial ballot to put that prop over the top.