CA: Remember the structural deficit?

OC Register ^ | 9/28/06 | Editorial

[NormsRevenge]

One issue that needs much more play in the gubernatorial election is California's structural deficit. On Sept. 26 state Legislative Analyst Elizabeth Hill released her latest analysis of the state budget.

She found that the state's structural deficit – its nagging inability to pay its bills – will be "in the range of $4.5 billion and $5 billion projected for" fiscal 2007-08, which begins next July 1, and fiscal 2008-09. That's up from about $3 billion in her budget estimates earlier this year.

Democratic gubernatorial candidate Phil Angelides has said the state's budget problem stems from too little revenue, and wants to increase taxes. But the LAO's analysis shows that taxpayers are more than doing their part to pay record levels of taxes. ..

--snip--

That's a 20 percent increase in tax receipts in just two years. What more can government expect from its already overburdened taxpayers?

The real problem is spending.

--snip--

Such slower growth in revenue – coupled with the new spending Gov. Schwarzenegger has advanced the past two years and the even greater spending proposed by Mr. Angelides – could widen the structural deficit.

Is the answer tax increases, such as those Mr. Angelides wants? They would only slow the economy, making matters worse, Mr. Adibi warned.

At least Mr. Angelides has advanced a solution, however bad. Gov. Schwarzenegger has pledged that, if re-elected, he won't increase taxes. As to the structural deficit, his campaign's press secretary, Julie Soderlund, told us that in the last three years, the governor "has reduced the state budget deficit 80 percent without raising taxes" ...

--snip--

Of course, he hasn't held the line on spending, increasing it 28 percent in just two years. ..

--snip--

This should be topic A in the sole gubernatorial debate Oct. 7.

[NormsRevenge]

California, Living on Borrowed Money, Living on Borrowed Time.

[NormsRevenge]

California's Legislative Analyst's Office


California Spending Plan 2006-07

http://www.lao.ca.gov/2006/spend_plan/spending_plan_06-07.html

Overview of the 2006-07 Budget

[NormsRevenge]

State Spending Plan
State Budget

California Spending Plan 2006-07: The Budget Act and Related Legislation
http://www.lao.ca.gov/PubDetails.aspx?id=1517

September 26, 2006
Full Report: HTML PDF
The state spending plan for 2006-07 includes total budget expenditures of $128.4 billion, sharply increasing funding for education, providing targeted increases in several other program areas, and prepaying nearly $3 billion in budgetary debt. The expanded commitments included in this spending plan are in striking contrast to the four previous years, when policymakers were faced with closing major budget shortfalls. Despite much stronger-than-expected revenues, 2006-07 expenditures exceed revenues, with the difference being covered by the drawdown of carryover reserves available from 2005-06. Based on our out-year estimates of revenues and expenditures, we estimate that this imbalance will continue in 2007-08 and 2008-09 absent corrective action, with annual operating shortfalls in the range of $4.5 billion and $5 billion projected for this period.

[Digger]

Anyone that places a vote for either of these two dunces deserves the consequences.

[econjack]

Democratic gubernatorial candidate Phil Angelides has said the state's budget problem stems from too little revenue, and wants to increase taxes.

I don't know if I've ever heard a liberal say: "You know, we're spending too much of the taxpayers' money." What is it about liberals that makes them think they know how to spend my money better than I do? Am I missing something here?

[samadams2000]

Remember this....Not ONE government employee was fired after the biggest fiscal collapse in Ca history.

[calcowgirl]

Based on our out-year estimates of revenues and expenditures, we estimate that this imbalance will continue in 2007-08 and 2008-09 absent corrective action, with annual operating shortfalls in the range of $4.5 billion and $5 billion projected for this period.

Add $3 billion to those numbers (annually) if the infrastructure bonds pass.

[Amerigomag]

I'm trying to imagine why the electorate is tolerating this:

1) A significant plurality of the electorate receives state monies directly and has no interest in curtailing spending.

2) A modest percentage are liberals who see no problem with deficit spending

3) A small percentage are partisan Republicans and would support Angelides if he got their party's nomination.

[Mr. Jeeves]

Solution to the structural deficit? Office buildings full of paid professional Democrats in Sacramento need to be vacated ASAP. Plus, the state is renting way too many illegal aliens. ;)

[Mr. Jeeves]

4) Life in California is far too good, in spite of the relatively high taxes, so politically indifferent voters (the vast majority) aren't really paying attention to what their state government is doing to them.

In North Dakota, Democrats would never get away with this stuff - people in California just have better things to do than worry about politics. A sharp recession might wake them up.