Wednesday, July 22, 2009

And the Beat Goes On--California's Smoke & Mirror Budget

(Note: You might like scrolling to the bottom and clicking on the YouTube video then reading this post while you listen)

Remember “Cheers”? I’ve always been more Cliff Claven than anyone else, but I’m thinking about Woody. There were times when stuff would happen to Woody, either with a girlfriend or some other personal disaster.

Sam or Diane or Norm would ask him something like, “Aren’t you really mad about that?”

To which Woody would respond, in that flat, monotone, Midwestern way, “I’m a little ticked.”

Well, I’m more than a little ticked and it’s been bugging me all morning. You see, I have the misfortune to live in California. The State of California just announced yesterday that the Legislature and Governor’s office have agreed to a balanced budget for the fiscal year that started 3 weeks ago. And we’re all supposed to rejoice.

Except that it’s a crock. It’s a sham. It’s a subterfuge. It’s fraud.

Our grand-glorious Governor and Legislature have put together a budget which does not contain tax increases and yet manages to close a $26 billion deficit. Sure, and I’m going to wake up tomorrow with a full head of hair.

Granted, as AP reported, “the plan cuts $15 billion from government programs by slashing spending on schools, universities, health care, welfare and in-home support for the disabled and frail.

They just don’t get it. The time for “smoke and mirrors” and sleight of hand are over. But that’s exactly the kind of budget that has been created. The most egregious example of that is a proposal to “save”$1.2 billion by paying state employees on July 1, 2010 rather than on June 30, 2010 (in other words pushing their paycheck one day into the following fiscal year).

The state is also going to take $4 billion worth of payments to local governments and use it to balance the budget—repaying it with interest over 3 years.

But the good news is that legislative Republicans prevailed. There are no new taxes or tax increases. No, that will be left to the municipalities who will have to increase fees and taxes in order to balance their own precarious budgets.

Unfortunately, the Republicans are thinking like so many failed businesses who focus on cost cutting rather than on revenue increase. You’ve got to think on both sides of the ledgerbook in order to make a budget work. That’s basic and fundamental.

And without belaboring it there are ways to increase revenues. California is a major oil producing state yet has no severance tax. Put an increased tax on alcoholic beverage purchases (I smoke but don’t drink so I prefer a booze tax!).

No, what the state wants to do is accelerate the collection of 2010 personal income and corporate taxes to bring in revenue earlier. This would give the state an “interest free loan” until taxpayers claim the money on tax returns. More hocus-pocus.

Public employee unions have far too much influence in California. They forget that their jobs exist to serve the public. It’s that basic. And yet their complaints about schools and prisons are thinly veiled blackmail attempts primarily motivated by a desire to keep their jobs.

This kind of legerdemain will prevail until California fundamentally addresses its system of governance. And this state cannot wait much longer. Proposition 13 and 98 must be revisited. The State’s basic “operating structure” must be scrutinized, streamlined and made to work better. And the State must take a fundamental look at how it ought to be serving its citizens and reflect that in its organizational and fiscal structure. Until that happens, this state and especially its citizens are screwed. And maybe that’s why all morning I have had a song from the late Congressman Sonny Bono going through my head: “The Beat Goes On”. And it does. But it doesn’t get us anywhere.

This rant won’t make any kind of difference but at least I “officially” got it off my chest. I’m still more than a little ticked.

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