Earlier today my friend Gray Ghost asked me a very intriguing question: “What sense do you get of how the new California legislature (and Governor Moonbeam) is going to address your state's budget deficit?”
To say that this state has reached the terminus of a dead-end road would be an understatement. We’re in a state of undeclared bankruptcy, with red-ink deficits as far as the eye can see. The liberals running this state – from both major parties – have spent us into oblivion. Outgoing Governor Schwarzenegger was a disaster at least as bad as the guy he replaced in the recall election. The Democrats running the legislature wouldn’t know fiscal responsibility if it walked up and kicked them in the head. Governor-elect Brown is a classic Big Government nanny-stater in the pockets of the labor unions.
This state has about 14% of the nation’s population, and about 35% of the nation’s welfare recipients. That alone is a clear sign of disaster. But wait! There’s more!
We have government pension obligations that are simply unsustainable, coupled with one of the highest-paid government workforces in the country, thanks to the power of the unions here.
We’re awash in anti-business regulations that have been driving employers out of the state for a long time. The official unemployment rate stands at 12.0% as of October, the latest stat posted on the official government website.
So, the intuitive answer to the original question would be that the new Governor will try to get a “bailout” from Washington, while the legislature will resort to their usual efforts to increase taxes on the ever-shrinking productive sector.
Ah, but here’s the rub in that plan. Starting in January, the House of Representatives in the US Congress will be controlled by the Republicans, and that’s where all spending bills must, per the Constitution, originate. I think it’s highly unlikely that they’re going to be very inclined to throw money at Commiefornia.
Because of the passage in the last election of a couple of the ballot propositions, the state can no longer steal money from local governments to meet their own budget shortfalls (Prop 22), nor can they label tax increases as “fees” to try to circumvent the 2/3 approval requirement for the levying of new taxes (Prop 26). This is definitely going to put a crimp in any plans to steal more money from the shrinking pool of taxpayers.
Then add this to the mix: before the next election, and pursuant to the latest census, voting districts are going to be redrawn by an independent commission in order to try to attain true representative balance in this state, something long overdue. For the first time in a very long time, there are going to be elective races in this state – hopefully—that will actually be competitive. The Democrats’ death grip on power here may finally be broken.
Now, when you consider all those factors, I think that Brown and his fellow liberals are finally going to be forced into a position in which they’re going to have to make a serious effort to substantially cut spending. I don’t think mere cosmetics will work, either. That pig already has lipstick slopped all over its face.
If they don’t, I don’t know where they think they’ll get the money to sustain current spending levels. There is no Money Tree Forest anywhere, and their sources are pretty much dried up, as we’ve seen. The last effort to get voter approval for a tax increase, 2009’s Prop 1A, was defeated by an almost 2:1 margin.
Their further dilemma is that if they do actually make substantial spending cuts, their own constituency of handout recipients will set their hair on fire. That’s not the kind of reaction that typically leads to re-election.
All in all, the next year or two promise to have high entertainment value, as a whole lot of chickens finally come home to roost. Move over, Greece!