Taxable Talk

Last night I attended my monthly continuing education meeting. Lynn Freer, the head of Spidell, believes that sooner or later the bad budget bill being debated in Sacramento will be approved. I’m hopeful that they’ll throw it in the trash can, because what we need to do is very clear: real spending cuts.

Take a look at this chart from the Tax Foundation:

This is yet another case where a picture tells everything you need to know.

Revenues have been increasing, yet spending has zoomed higher and higher and higher. Spending cuts—deep, real spending cuts—must be made. The budget under consideration contains more borrowing and more bad assumptions. What happens when taxes go up? Tax revenues go down. If this budget is passed come June there will be more debates about the budget because California will be looking at another $6 – $10 billion deficit.

Hopefully the Republicans will stand firm and vote down this bad budget. In what I think is a hopeful sign, Senate Minority Leader Dave Codgill (R-Modesto) has been voted out and replaced by Dennis Hollingsworth (R-Murrieta).

The Sacramento Bee has an online calculator to show you how much the budget will cost (if approved). For a typical family earning $100,000, with two cars worth a total of $20,000, commuting 35 miles a day (total), and with two children, this budget would cost $1,197. That’s about $100 a month—far more than the benefits from the porkulus stimulus that was signed into law yesterday.

Do our legislative leaders in Sacramento have the guts to actually look only at budget cuts? No. Might they be forced down this road? Only time will tell.

As of this writing there’s no budget in California (doesn’t this sound familiar). That doesn’t mean that when I wake up in the morning that there won’t be a budget but it appears that the Democrats still need one more vote to pass the bad budget.

Jerry Pournelle, the science fiction author, had some cogent thoughts about California’s situation:

It’s not so much that the voters vote themselves largess from the public treasury, although that certainly happens; it is that those with a particular interest, such as civil servant including teachers and prison guards unions will always organize effectively while those who are affected less directly won’t, and the result will go in one direction.

I’ll repeat another learned mind: Whatever you have, spend less. It’s a lesson that California’s elected leaders need to learn.

The California budget crisis continues. As of this writing, the Legislature is locked in at the Capitol. There are apparently the votes to pass the budget in the Assembly, but Senate Democrats need to convince either one or two Republicans to vote for the budget. Senator David Cox (R-Sacramento) was considered the most likely to vote for the budget but he has stated that he won’t. It’s also possible that Lou Correa (D-Santa Ana) will vote against the budget; if that happens, yet another Republican will be needed to approve the budget.

Adding some humor to this is that Democratic leaders again literally locked the doors. Members of both houses of the state legislature can’t leave the building. The last time this happened (last year) the result backfired on the Democrats. We’ll see if locking the doors was a smart move or just more of the same.

As for the budget, if you read my previous piece on it you know I’m not a fan of it. I’ll let you know if it becomes the law of California.