The Fact of My Ignorance

So California’s budget woes have been going on for months now but the time for action is quickly growing near.  Unfortunately, while everyone agrees that action is necessary, nobody can agree on what those actions should be.  We’ve got a 26.3 Billion dollar gap still to close and accomplishing that in a bi-partisan way is looking to be nearly impossible.  Of course listening to statements from either side makes it seem so easy, “Just cut out our wasteful spending already!” or “Just raise taxes on the rich to where they belong!”.  But when you find out that if we were to, for example, cut all state funding for the UCs and CSUs it would still only save us 1.5 Billion or that raising corporate income taxes would only net us 430 million, it starts to look a little more complex.  Obviously a mixed approach will be necessary, at least until the economy begins to recover and the state’s income returns to normal levels.

The LA times has a very interesting little program on its website that allows you to try your hand at solving CA’s budget crisis.  It can be found here:

You Balance the Budget – LA Times

Screenshot from real life political computer game: "Take Back Illinois"

Well the Monday night deadline for CA politicians to agree on a budget came and went so Schwarzenegger was forced to send out 10,000 layoff notices to state employees.  The reason for the stall?  They were one vote short in the state senate.  California has a very unusual arrangement that requires a two-thirds majority in both houses of congress for a budget to be passed.  And after months and months of negotiations and concessions to republicans (the bill now consists of millions more in spending cuts than tax hikes) they were only able to entice 2 of the necessary 3 GOP senators to support the bill.

So when everyone woke up the next day and 10,000 more Californians were facing unemployment, did any of the senators who had voted against the bill, have second thoughts?  Did they acknowledge in anyway that thousands of CA families would now be suffering (and not to mention on the unemployment and/or welfare roles of the state) because of their posturing?  Nope.  In fact they gave a big raspberry to bi-partisanship and ousted the senate minority leader who helped negotiate the compromise bill.  The reason for these legislators’ ire?  The bill still contains tax hikes.  Literally, many of them will not vote for the legislation if it contains any tax hikes at all.

Unfortunately, CA is facing a 42 billion dollar deficit that absolutely cannot be fixed by spending cuts alone.  Governor Schwarzenegger recognizes this:

“If you think that you can do this budget without any increase in revenues then you have a big math problem because you can’t erase a $42 billion deficit without revenue increases,” Schwarzenegger said. “I hate taxes, but you when you are faced with that kind of reality, that’s what you have to do. We can only solve this problem with additional revenues and with spending cuts.”

We slashed 11 billion from the budget last year and the current budget has 15.2 billion in further spending reductions in the works.  I don’t think we can cut our way to solvency without unconscionably… Continue reading