CrackerJax
New Member
California Begging
Posted 12/24/2009 06:46 PM ET
States: The once-great state of California has been reduced to begging from the federal government. But no matter how much help the feds give, the state's fiscal ills won't end until its lawmakers stop spending money.
To say California is a mess is an understatement. In the current fiscal year, the state is expected to post a deficit of $21 billion as the budget continues to spiral out of control. Even after last year's epic budget battle, when Californians were hit with $12.5 billion in new taxes and $6 billion more in borrowing, the state still isn't close to bringing revenues and expenditures into balance.
So Gov. Arnold Schwarzenegger has an idea: He wants President Obama to give him $8 billion or else, he says, he'll kill or slash most of the state's welfare programs, cut pay for 200,000 state workers and end two tax breaks for big corporations.
How far the Golden State has fallen. Once the nation's unquestioned economic and innovation leader, it's now a laggard. With 13% of the country's population, it has nearly a third of its welfare recipients. Though it's still the world's seventh-largest economy, it's in danger of sliding backward as its fiscal and economic crises drive jobs and workers away.
The White House should do California a favor and say no. The only thing that will help at this point is for the state's citizens to vote the Legislature out of office or for the state to be forced into bankruptcy. The Legislature has been under almost exclusive Democratic control for decades. Time for change.
Lawmakers in Sacramento are held in almost universal contempt by Californians, yet most are safe inside their carefully gerrymandered districts. They're the country's highest-paid state legislators, pulling down nearly $100,000, with $30,000 in tax-free money for their "expenses" and a state-provided car for their use.
Yet look at the state's imploding economy and shrinking population, and it's clear they're guilty of negligence at best and malfeasance at worst. They've handed much of the control of the economy and education to the public employee unions that have systematically looted the public fisc. Businesses and high-income entrepreneurs are leaving the state in droves, fed up with the anti-business zealots who control Sacramento.
By most objective measures, the economy is among the worst in the nation. Unemployment of over 12% is well above the national average of 10% no surprise, considering the nonpartisan Tax Foundation recently ranked California 48th among the states on business-tax competitiveness.
A Milken Institute study recently estimated that, from 2003 to 2007, California lost 79,000 manufacturing jobs due to regulations and high taxes. If manufacturing's share of the work force stayed where it was in 2000, the state would today have 1.6 million more jobs, $101 billion more output and $5 billion more in tax revenues.
From 2000 to 2007, state spending surged more than 60%. But revenues over the same time have shrunk because businesses and entrepreneurs are being strangled by higher taxes and thousands of new regulations. The regulations alone cost $493 billion a year.
In fiscal 2011, as budget gimmicks used to get the state through this year expire, spending will be nearly 15% higher. Such irresponsibility must stop. As long as the problem lies in Sacramento, the solution won't be found in Washington.
Posted 12/24/2009 06:46 PM ET
States: The once-great state of California has been reduced to begging from the federal government. But no matter how much help the feds give, the state's fiscal ills won't end until its lawmakers stop spending money.
To say California is a mess is an understatement. In the current fiscal year, the state is expected to post a deficit of $21 billion as the budget continues to spiral out of control. Even after last year's epic budget battle, when Californians were hit with $12.5 billion in new taxes and $6 billion more in borrowing, the state still isn't close to bringing revenues and expenditures into balance.
So Gov. Arnold Schwarzenegger has an idea: He wants President Obama to give him $8 billion or else, he says, he'll kill or slash most of the state's welfare programs, cut pay for 200,000 state workers and end two tax breaks for big corporations.
How far the Golden State has fallen. Once the nation's unquestioned economic and innovation leader, it's now a laggard. With 13% of the country's population, it has nearly a third of its welfare recipients. Though it's still the world's seventh-largest economy, it's in danger of sliding backward as its fiscal and economic crises drive jobs and workers away.
The White House should do California a favor and say no. The only thing that will help at this point is for the state's citizens to vote the Legislature out of office or for the state to be forced into bankruptcy. The Legislature has been under almost exclusive Democratic control for decades. Time for change.
Lawmakers in Sacramento are held in almost universal contempt by Californians, yet most are safe inside their carefully gerrymandered districts. They're the country's highest-paid state legislators, pulling down nearly $100,000, with $30,000 in tax-free money for their "expenses" and a state-provided car for their use.
Yet look at the state's imploding economy and shrinking population, and it's clear they're guilty of negligence at best and malfeasance at worst. They've handed much of the control of the economy and education to the public employee unions that have systematically looted the public fisc. Businesses and high-income entrepreneurs are leaving the state in droves, fed up with the anti-business zealots who control Sacramento.
By most objective measures, the economy is among the worst in the nation. Unemployment of over 12% is well above the national average of 10% no surprise, considering the nonpartisan Tax Foundation recently ranked California 48th among the states on business-tax competitiveness.
A Milken Institute study recently estimated that, from 2003 to 2007, California lost 79,000 manufacturing jobs due to regulations and high taxes. If manufacturing's share of the work force stayed where it was in 2000, the state would today have 1.6 million more jobs, $101 billion more output and $5 billion more in tax revenues.
From 2000 to 2007, state spending surged more than 60%. But revenues over the same time have shrunk because businesses and entrepreneurs are being strangled by higher taxes and thousands of new regulations. The regulations alone cost $493 billion a year.
In fiscal 2011, as budget gimmicks used to get the state through this year expire, spending will be nearly 15% higher. Such irresponsibility must stop. As long as the problem lies in Sacramento, the solution won't be found in Washington.
One of the big problems, money is FLEEING the country like never before and foreign investment is drying up (they must be crazy like me!) 