AFT Guild

State budget relies on sham revenue

By Dan Walters -
Published 12:00 am PDT Tuesday, September 16, 2008

They had to be kidding. Nobody could have dreamed up a less responsible, more gimmicky, sure-to-backfire state budget than the one California's political leaders cobbled together and were jamming through the Legislature on Monday night to end a months-long stalemate.

But it wasn't a joke, or at least not a funny one. They violated every principle of fiscal responsibility by conjuring up billions of dollars in sham revenues – basically money borrowed from corporate and personal taxpayers that would have to be paid back later – to cover a huge deficit so they could blow town.

Remember those Democrats who promised to end years of deficit borrowing and bookkeeping trickery with a straightforward budget that raised taxes to cover obligations? They embraced a get-out-of-town scheme that's the antithesis of common sense budgeting, and hid most of the details until the last minute.

Remember those Republicans who made noise about not raising taxes, even temporarily, because they would damage an already declining economy? Never mind. They opted for siphoning billions of extra dollars out of Californians' paychecks through "accelerated withholding" – money that consumers won't get back until they receive tax refunds in 2010.

Remember Gov. Arnold Schwarzenegger, who vowed never to sign a budget unless it had "reforms" to end the cycle of deficits and debts? The budget that's headed his way not only does virtually nothing to preclude future deficits, but probably would make them worse.

If Californians needed even more evidence that their state government is completely and irrevocably dysfunctional, those they elected to high state office provided it with easily the worst budget in memory.

Yes, the small businesses and individuals who have borne the brunt of the long budget impasse will get their overdue state checks, and that's no small matter, but everyone will be paying the price for this debacle for many years.

As details of the "compromise" emerged from the Capitol on Monday, the Bay Area Council renewed its call for a constitutional convention to overhaul state government.

"This year's budget deadlock shows better than perhaps any other recent event that our state needs a constitutional convention to fix a governance system that is hopelessly broken," said the council's president, Jim Wunderman.

"The defining feature of this budget is that it only makes next year's budget worse, and 'next year' is only nine months away. Of course, it's not just the budget. As we have previously stated, California's government suffers from drastic dysfunction – our prisons overflow, our water system teeters on collapse, our once proud schools are criminally poor, our financing system is bankrupt, our democracy produces ideologically extreme legislators that can pass neither budget nor reforms, and we have no recourse in the current system to right these wrongs. Drastic times call for drastic measures."


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