Gov. Arnold Schwarzenegger and lawmakers scrambled Wednesday to avert a financial meltdown, and public officials across California braced for annihilating cuts on the day after voters trounced their leaders’ rescue plan for the state.
Within two hours of returning from Washington, D.C., the governor huddled behind closed doors with Democratic and Republican legislative leaders to grapple with a projected $21.3-billion budget shortfall for the coming fiscal year and stop state government from running out of money by July.
It is a much needed mess. The people of California are learning what the rest of us in the U.S. need to learn . . . You cannot have lavish public spending without taxes. If you want to pay less to the government, you will have to demand less spending.
Since much government spending is counter-productive, this will be a good thing.
This is the part that gets me “State lawmakers will remain the best-paid in the nation even with the scheduled wage cut from $116,208 to $95,291. They also retain paid living expenses of $35,000 a year.” Not to be harsh but a part of the problem is overpaying people across the board (not just the lawmakers)
On the other hand, salary comparisons across the board with parts of California and other parts of the country simply don’t make any sense. Case in point, my daughter and my brother both bought houses of about the same age and size at about the same time. He bought in rural Midwest for $15,000. She paid $785,000 for basically the same house in a lower middle class suburb in the San Francisco area. True both properties have undoubtedly lost value (her’s having much further to fall). But is it really fair and equitable to expect them to both make the same wage? And don’t get me started on the impact of progressive income tax in a situation like this.
On a state by state comparison website California ranks 6th in State and local taxation at 10.5% for the average taxpayer. Their top income tax rate is at 9.3% on income over 47k They also have a 6.25 sales tax. Texas by comparison is tied for 42nd at 8.4% state and local combined with no income tax and a 6.25% state sales tax. I believe that Texas was facing a 3.5 billion deficit over the next two years. A hole that the legislature will fix in this year’s two year budget blueprint through I expect a combination of spending cuts and minor tax hikes (the Texas legislature meets only 6 months every two years).
I just lo-o-o-ve Texas! (grin)
The entire problem falls with the unions – forced increases, pension out the window, and no one will touch them. BTW chips, CA sales tax is now 9.5.
Arnold ran his campaign on lowering taxes and balancing the budget and has done NOTHING. He’s no longer a Republican. And his threats are over the top.
Ah-nuld is still a Republican, AL. He’s the kind of Republican the deep thinkers like David Brooks are telling us we need to get behind. I think they’re right: We need to all get behind them and push their posteriors out the door.
There is no single area that encompasses the entire problem. It is a complex web of regulation, taxation, mandatory spending, tax caps, obligations to state workers unions, and a host of other messes, many of which are written into the state constitution by voter referenda, that have gotten us to this point. And no one is willing to tackle the really hard solutions, like taking on the unions or amending Prop. 13, that might actually get us somewhere. And all we get from the Governator are short-term fixes like borrowing and selling off state property (which I think is like Esau selling his birthright for a good meal, that will satisfy for only an hour). Still for all the anger at the governor and legislature, I truly believe we Californians have no one to blame but ourselves. If they are clowns, they are our clowns, who we elected. If the budget process is a mess, we made it that way through 30 years of ballot box budgeting referenda.
#6 – you’ve hit on the growing divide in America – between those who work for the government and those who don”t. And I fear it’s only going to get worse…
#8, had California’s legislature only increased spending for growth in population and inflation, you would not have a deficit today. The problem isn’t taxation, it’s spending.
What we in California need…..but will never get…..is a return to a part-time legislature…..for starters. Couple that with a salary and perks cut for the legislature, and maybe it will mark the beginning of real reform. Public employee retirement benefits are out of line, too, and they need a real overhaul.
A line item veto for the governor would be nice, too!
A line item veto would, in all liklihood, cause spending to increase, not decrease, as legislators and the governor log-roll to get each other’s pet projects and programs into bills.
That’s why the initiative process is so important, because this gives us a way to stop these increases dead in their tracks.