Does California budget go too far?
With a budget deal negotiated in secret, votes in the dead of night, and last minute deals, what have California leaders wrought? <p>
For years California lawmakers have "balanced" the budget with a combination of superficial accounting maneuvers, creative borrowing and unrealistic projections. While better than past years, this budget continues the no-compromise tradition of California politics much to the detriment of the state. <p>
The Golden State has limped along in a fiscal illusion for decades. Term limits reduced incentives for lawmakers to work together, voters approved spending increases, and the state itself continued to spend without regard to tax levels. Yet California has muddled through. <p>
And then the economy tanked - big time and in a way no one knows how to fix. <p>
The smoke and mirrors no longer hid the fiscal shenanigans of state leaders. And still, they ignore the economy's new reality and focus on special interests instead of the wellbeing of the entire state. <p>
We will all pay a steeper price than we needed to because of their delay - the cuts will be deeper, the taxes higher and the borrowing greater. It will impact all of us, but especially the poorest among us - those we are called to protect and who are least able to weather the economic storm today. <p>
Social services have been reduced for years as a means of dealing with poor fiscal management. Yet the cuts do not stop with the services this time, as education, health care and other necessities will be severely impaired. <p>
We will all pay increased sales tax and personal income tax, but the deal contains no new corporate taxes. It does, however, have significant business tax breaks for out-of-state businesses (hoping to lure employers to California.) Businesses that operate solely in the state, mostly small firms, will get no relief. And there's $100 million in breaks to encourage movie production in California - something the governor has wanted for years. <p>
While the roots of the crisis go back many years, the magnitude of the deficit became excruciatingly apparent with the passage last September of the 2008-09 state budget. The long-delayed budget was filled with wishful thinking. That "solution" lasted about two weeks.
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Four months ago, state officials laid out for the legislature the magnitude of the collapse in state finances, but still nothing happened. <p>
Three months ago the Big Five - the governor and the party leaders of both houses - began negotiations in private. The public and the legislature were kept in the dark. And, in fact, some lawmakers rightfully refused to vote on anything unless they saw it in writing at least 24 hours before a vote. <p>
The state began issuing IOUs, but still nothing happened. <p>
Veteran Sacramento observers have never seen anything like this, but predicted we would have to go to the cliff before lawmakers acted. But by then philosophical differences had morphed into all-or-nothing, take-no-prisoner-stands. <p>
The state was dancing on the edge of fiscal collapse. Lawmakers complained that their jobs were at stake and they couldn't compromise. Republicans replaced their Senate leader in the dead of night. Democrats refused to buck the unions. <p>
Only with last minute concessions and Senators locked in the building was anything done. <p>
Because of these months of delay, the "piper" is now demanding deeper cuts and higher taxes than was necessary months ago. And as if to underscore the dysfunctional nature of political debate in California, party loyalists from both sides of the aisle are planning retribution for those who did not tow the line. <p>
Have we moved away from the cliff? Yes, but not very far. Voters, disillusioned with lawmakers, must now approve many of the changes in a May special election. The size of the Federal stimulus to states will temper some of the changes, but how much is not known. And future revenues are always uncertain. <p>
Leaders have already announced that revisions will be made in June, after more of these questions are answered. <p>
At a time when we should all draw together, we continue dancing along the edge, from which California will not recover quickly. We must demand that our lawmakers work together. <p>
With such a flawed process how can the final result be trusted? Wouldn't it be better to take the best ideas from both sides of the aisle? <p>
All of us can still honor our philosophical differences, but we must also learn that the common good demands more than platitudes, empty rhetoric and illusory solutions. Only then will we make meaningful steps to fiscal responsibility. <p>
Steve Pehanich is Director of Advocacy and Education for the California Catholic Conference. Visit www.cacatholic.org for information on legislation, elections and Catholic Social Teaching. <p>
<i>By Steve Pehanich<br>
From March 6, 2009 issue of Catholic San Francisco.</i><p>
