CALIFORNIA IS WORST-RUN STATE FINANCIALLY

NCPA Daily Policy Digest ^ | June 23, 2003 | Dennis Cauchon

[bruinbirdman]

ECONOMY NOT TO BLAME FOR STATES' BUDGET WOES

The financial problems racking many state governments this year have less to do with the weak national economy than with the ability of governors and legislators to manage money wisely, according to a USA Today analysis of how the 50 states spend, tax and balance their budgets -- or don't.

Utah, Georgia and Delaware are the best financial stewards, according to the analysis of the states' financial performance:

o The key to their success: restraint -- during the economic boom of the late 1990s, these states limited both spending growth and tax cuts.

o After the economy weakened in early 2001, they acted swiftly and decisively to keep their finances sound.

California, the worst-performing state in the analysis, did the opposite:

o It approved huge spending increases and tax cuts during the boom.

o When the economy soured, the state began borrowing money and using accounting gimmicks to avoid its day of reckoning.

o Today, it continues to spend $1 billion a month more than it takes in.

To make ends meet, some states have removed thousands of low- income adults from Medicaid and reduced benefits for others. Many states have raised college tuition, cigarette taxes and other narrowly targeted fees. Six states have increased sales and income tax rates, and several more may do so this week.

But one thing has remained constant throughout the crisis: State spending keeps growing.

It went up 6.3 percent for the fiscal year that ended June 30, 2002, and it's on track to rise about 5 percent in the 12 months that end June 30.

Source: Dennis Cauchon, "Bad moves, not economy behind busted state budgets," USA Today, June 23, 2003.

For text

For more on State Budgets

[NEWwoman]

And California is totally run by Democrats.

[Ernest_at_the_Beach]

No surprise!

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[Ernest_at_the_Beach]

Right!

But we have a plan!
See my tagline!

[glock rocks]

... and Utah is totally run by Republicans.

[goldstategop]

We plan to spend more money and pretend we don't have a money crunch. Now let's go back to vacation.

[NEWwoman]

Good plan!

[Uncle Hal]

For more detail go to www.usatoday.com. This is the papers lead story on page one in todays paper and it puts California at DEAD LAST among the 50 states as far as fiscal responsibilty over the last 5 years is concerned. CA. only has 2 stars while the 49th state, Montana, gets 4 stars. All the more reason to recall Davis.

[bruinbirdman]

"For more detail go to www.usatoday.com."

Click on "For text" above.

yitbos

[Uncle Miltie]

This is not possible. They are implementing a monorail.

[w_over_w]

"When a tax rate becomes excessive, it ends up losing not only the increased taxes it was hoping to get, but the existing taxes it had been getting as commerce moves elsewhere."
Tom McClintock

Also known as "bracket creep" this is a proven economic principle. It was also grossly violated during the Carter Admn. Jimmy boys response? . . . "productivity is bad". Davis' response, "you're all sore losers, I won fair and square".

Attitude and incompetantcy wise . . . history has repeated itself.

[stumpy]

Yeah, and I think they're stealing from the California Lottery. Seems the last week or so the "jackpot" has been down a million or so a draw from what the average annnounced payout would be.

[goldstategop]

With no money. This a first in California history! ;-)

[w_over_w]

incompetantcy = incompetence

Yikes, this recall is effecting my grammer!

[Uncle Hal]

Thanks for the heads up.

[kellynla]

McClintok was on KRLA this am. Looks like Arnold is running. Interesting article in "Parade" yesterday's paper.

[NathanR]

"This is not possible. They are implementing a monorail."


To Disneyland. LOL.

[goldstategop]

Sell California to Mike Eisner. :)

[Chuckster]

The problem in a nutshell:


Polls show that voters want what they cannot have: more spending and lower taxes simultaneously. Elected officials who deviate from this view have been punished harshly whether they support spending cuts, tax increases or both.

[NathanR]

Why not. He already owns Anaheim, pretty much. (At least as far as power goes.)