Via OC Progressive, Assemblywoman Noreen Evans, Chair of the Budget Committee, spells out slowly for everyone the structural problems and false assertions about the California budget process. If you have non-political junkie friends who want to understand this in a quick and easy way, pass them this link.
This is a very good place to start. Evans puts the lie to three big myths about California:
1) The “runaway spending” assertion. Um, no. Population and inflation accounts for 68% of the increase. I LOVE how Evans cites the tough on crime sentencing laws as a key element of over-spending, in this case on prisons (20% of the inflation and population-adjusting spending increase). Ballot-box budgeting with no dedicated funding stream (separate from the initiatives voters stopped lawmakers from raiding yesterday, which have funding sources) also contributes to the problem. And there are the prior tax cuts like Prop. 13 and Arnold’s VLF cut (which would have filled this ENTIRE current deficit). To cover for this we sell bonds and now have to pay out interest to service that debt. The problems beget more problems, and necessitate more cuts because the conservative veto resists taxes.
2) There’s all these “waste” in the budget. Again, no. The Performance Review of 2004 found virtually nothing that would save the state any real money.
3) It’s just all that messy partisanship from both sides. No. The Democrats have made $40 billion in cuts over the past several years. The Norquistian Yacht Party won’t budget because they don’t have to. Evans details the 2/3 requirement and the conservative veto, and cites Norquist himself!
Seriously, pass this to your friends. Facebook it and Twitter about it. If you internalize these concepts, the solutions are obvious – we need to restore democracy and give our elected officials a budget process and a Constitution they can actually navigate.
And while we’re at it, let me debunk one other myth. The one that says all California has to do is sell San Quentin and all that surplus property and save the state. Well, the money raised from selling state property would not be able to be used to balance the budget.
Under the terms of Proposition 60A, approved by voters in November 2004, proceeds from the sale of any state surplus property can only be used to pay the interest on $15 billion in budget-balancing bonds sought by the GOP governor and approved by voters in March of the same year.
Once the bonds are paid off – the Legislative Analyst estimated at the time that cash from the sale of surplus property would speed retirement of the 30-year notes by a “few months” – sale proceeds would be deposited in the state’s reserve account for emergencies.
Oops.
Noreen Evans FTW. This is LONG overdue, but props to her for putting this together. It busts the main myths thoroughly and convincingly.
I would particularly like the commenters here who spout the myths of “runaway spending” and “waste” to watch this. We’ve had it with your baseless lying.
Schwarzenegger has been systematically borrowing money in one time gimmicks, then passing a constitutional initiative to bar it from ever being used again.
We can’t issue long term bonds to cover the deficit, as we did in 2003, because we passed Proposition 58 in 2004 to “cut up the state’s credit card.” Schwarzie got $15 billion in deficit bonds in the companion measure, Prop 57. He immediately turned around and issued $10.7 billion in bonds to cover the carryover debt from 2002-2003.
About half that debt was due to saving the state from Enron. Gray Davis had sought to pay for it with tax increases, including raising the VLF and a temporary one cent sales tax increase, but was shot down by the Republicans in the legislature. The Republicans started a recall, Schwarzie was elected, and promptly rescinded the VLF fee increase, creating a $4-6 billion permanent hole in the budget.
He’s borrowed, internally and externally, at least $20 billion to cover that hole, just getting us in deeper ever year.
For example, we could use the remainder of the $15 billion in authorized deficit bonds to help out this year, but he already tapped that, issuing $3 billion in bonds in 2008.
Raiding special funds? Der Governator took $1.3 billion from the Transportation Investment Fund in 2004 & 2005, money for roads for cities & counties. Then he passed Prop 1A in 2006 so that fund could never be tapped again.
He’s also borrowed $9 billion from the schools.
…is the myth that getting rid of state employees will save tons of money, along with the corollary that state workers are somehow exempt from paying taxes, and therefore don’t count as “taxpayers”.
Noreen Evans ROCKS!!!
Thanks for the post,
1. When you say that population and inflation account for 68% of increase, this leaves 32% for non-population and inflation. There’s your “runaway spending”
2. I don’t know the details of the study, but I did a little back of the excelsheet data workup (based on the state’s budget website) http://www.dof.ca.gov/budgetin…
From 1977-2010 budgets, expenditures increased by an average of 7% per year. Again, this is after five-minutes of work, so I understand there’s plenty of nuance that’s probably missing. Just saying, a 7% increase a year (give or take) is not sustainable, whether it’s a personal budget or the state of california.
3. repubs v dems…bleh, but I’m not sure where the $40 billion in cuts comes from–maybe let me know. According to that same link above, expenditures have decreased $10 billion over the last couple years (again, this only decreased the average increase (if that makes any sense) to 7% per year)
thanks again for an informative site,