 |
Townhall...
Slouching Towards
Insolvency (The California Way)
By Austin Hill
The U.S. Federal Government is on a collision course of debt and
deficits.
And California may be the best example yet of “the feds on steroids.”
As state governments continue to feel the recession’s impact and are
staring-down daunting fiscal challenges, the wisdom of the American
people has been prevailing in some of the most unlikely places. In
states as diverse as Wisconsin, Idaho, New Jersey, and Ohio, Governors
and legislatures have stood-up to the ever-expanding demands of
government employee unions, reigned-in employee compensation growth,
and have cut state spending. Even in liberal Massachusetts the
Democrat-led House of Representatives voted last week to limit the
powers of their state government employees’ unions.
But the wisdom hasn’t yet made it all the way out to the Left Coast.
With a budget deficit of somewhere between $10 and $15 billion – a
deficit that is expected to swell to about $25 billion by the middle of
2012- California politicians have continued their self-serving spending
sprees of the past many years, while at the same time legislating
itself further and further away from any semblance of being “business
friendly.”
Like it or not, California is both a global economic epicenter, and a
spectacular place in the world. It is home to the highest mountain in
the contiguous forty-eight states (Mount Whitney), the lowest valley
(Death Valley), Facebook, “Surf City, U.S.A.”(Huntington Beach), Apple
Computers, The World Champion San Francisco Giants, eBay, Legoland,
Cisco Systems, “Hollywood,” three U.S. Presidents (Richard Nixon by
birth, and Herbert Hoover and Ronald Reagan by “adoption”), and
Mitsubishi Motors of North America.
This is to say that California can be and should be a place of robust
economic opportunity across multiple sectors. But politicians have a
stranglehold on the state, and consequently, businesses and capital are
leaving, while productivity is slumping.
After Governor Jerry Brown took office in January, he noted that
California had a history of “kickin’ the can down the road” with its
budget woes, and that Californians had been treated with “evasions,”
“accounting gimmicks,” and “smoke and mirror” tricks on state finances.
At his first State of the State address, he announced that his plan to
solve California’s dreadful fiscal problems would involve both cuts in
government spending, and – if California voters approved – tax
increases.
This seemed very reasonable. Very practical. Very “bi-partisan,” if you
will. And indeed Governor Brown has brought about some cuts in
government spending, in part by eliminating taxpayer funded mobile
telephone and vehicle privileges for government workers (most of us in
the private sector don’t get “free” mobile telephones and cars from our
employer, but this had apparently become standard operating procedure
for many California government employees).
But the pathway to a tax increase has not been so smooth. Allowing
California voters the opportunity to vote themselves a tax increase
requires the state Assembly and Senate to legislate a special election,
and Brown has insisted that the passage of special election legislation
must have at least some Republican legislative votes.
Thus far, however, Republican legislators have refused to cooperate.
Government employee unions are now becoming even more fierce with their
demands that Brown and the legislature just simply “legislate tax
increases” without a public vote, but Governor Brown has remained
consistent with his pledge that “the people” must decide on tax
increases, and that Republican legislators must provide political
“buy-in.”
So what do California leaders do when the deficit is exploding and tax
hikes are at a stand-still? In Governor Brown’s case, he has committed
to spending millions of more non-existent tax dollars on unionized
government employees. For example, earlier in April Brown approved a
new contract for the California Prison Guard’s union, which will allow
guards to accrue unlimited numbers of un-used paid vacation days each
year. When a guard retires, the un-used vacation time can now be
“cashed-in” at the guard’s highest salary rate- a sweet pay-off from
Governor Brown to a labor union that spent nearly $2 million on his
campaign last year.
The precise cost to the taxpayer for this political quid-pro-quo is
impossible to know right now. But state government estimates suggest
that Brown just saddled Californians with an additional $600 million in
pension liabilities.
As for California legislators, they’ve been working on bills that would
ban the sale of caffeinated beer, raises taxes on “sugary soda drinks,”
require all public school children to be taught “Gay History,” and
mandate the establishment of an official California “Parks Make Life
Better” month. There have even been efforts at a bill that would
require the use of a “fitted sheet, instead of a flat sheet, as the
bottom sheet on all beds within a California lodging establishment…”
Indeed, the wisdom of America is breaking-out all across the country
-except at the White House, the U.S. Senate, and across that vast
region known as our 31st state.
Read it at Townhall
|
