Monday, February 9, 2009

My Town Monday: California's Budget Woes

I was going to do a perfectly innocuous post about Downtown Disney, but then I got to thinking about California's current budget crisis and decided to blog about that instead. As I'm sure everyone has heard by now, California is in the red, big time. We've been dealing with recurring budget shortfalls for some time now, but this year the problem is worse than ever. Last February, the budget was short sixteen billion dollars, but as of Jan. 27, 2009, it was estimated at more than $40 billion from now through the 2009-2010 fiscal year, according to the Los Angeles Times.

State officials are figuring out where to cut while praying for help from the federal government in the stimulus bill now before the Senate. Of course, we're not the only state in trouble, though our debt may be the largest in the country. So why is California in such bad shape?

One of the problems is the fact that it takes a 2/3 vote of the state legislature to pass a budget. This means that a relative handful of representatives can hold the entire process hostage to their own agenda, whatever that may be. Another problem is the fact that Californians have seldom met a bond issue they didn't like and now the state's credit rating is in the toilet. Apparently, some of us don't realize that a bond issue isn't free money. It's debt that ultimately has to be repaid along with interest, and using bond issued to finance state projects always costs more in the long run than if we paid for them through tax increases.

Of course, another problem is the fact that over the last thirty years conservatives have managed to convince the American people that tax is a four-letter word. And the liberals haven't done a very good job of explaining that taxes are the price we pay to live in a functional and semi-civilized society. (Sorry, couldn't resist.) I'm not sure Californians have figured out yet that votes have consequences, as when we recalled Governor Gray Davis and replaced him by our current Governator who talks a good game but so far hasn't governed very effectively. (Talk about someone who likes to borrow and spend!) We're all to blame here, though. There are some votes I'd change if I could go back in time, but I can't.

The most controversial thing the Governator has done recently is to require state employees to take off two extra days a month, without pay, to help cut the budget deficit. It adds up to a de facto 9-10% pay cut. Personally, I don't think this is such a bad idea, but the unions are fighting it. I'm a union supporter, but I can't agree with them. I know the job of the union is to protect its workers, but when the employer is on the verge of bankruptcy, something has to give. In a time when workers in the private sector are losing their jobs by the hundreds of thousands, not to mention their health care and their homes, I can't help thinking public employees should stop complaining, enjoy their days off and count their blessings. At least they still have jobs, benefits and pensions to look forward to. That's more than a lot of Americans can say these days.

I just hope someone in Sacramento finds a solution to this mess and soon.

Linda

My Town Monday comes to us via Travis Erwin, http://traviserwin.blogspot.com/. Thanks, Travis! Click on his site to read his latest post and find links to the other participants.


My Town Monday is the brilliant brain child of writer/blogger Travis Erwin. Thanks, Travis! Go to his blog to read his latest post and find links to the other participants.

12 comments:

Reb said...

I agree about the unions. They have done a great service for the working stiff, but there comes a time when they have to stop and smell the impending disaster too. Most Albertans hated our last Premier (Klein) for all the budget cuts he handed out, but we are now debt free. It hurt, but it was worth it in the end. Of course, with the new idiot we have and the new economy, it may not last long.

Sepiru Chris said...

Terse, non-partisan overview of the situation without resorting to argumentum ad hominem. Nice.

Teresa said...

Love the graphics, Linda. I wouldn't call this a rant, though. I think you summarized things quite well and pretty even-handedly. We have to read Asian newspapers for a Modern Asia class that I'm taking. In Thailand they are calling for a return to "Buddhist economics", which they define as stoic self-sufficiency and the tendency to put morality and helping other people before making huge bucks. I'm not sure those values are just Buddhist. Anyway, I think we all need to readjust our mindset about what is important in life and how many things we really need to live. If the Thai people are able to adjust down, then why can't we?

Linda McLaughlin said...

Well put, Reb. Hope things stay good in Alberta.

Thanks, Chris and Teresa. I agree that we all need to re-think the way we do things and adjust down, if needed. The age of greed is over, I hope, but the collateral damage will be large and disheartening. A return to ethics of any stripe would be a step in the right direction.

Travis Erwin said...

I'm way behind in keeping up with the news so thanks for giving the details here. Hope they get things straightened out soon.

Uncertainty is no fun for anyone.

lyzzydee said...

I am a unionist as well,(its my day job!!) but sometimes you just have to see the bigger picture and a short term loss could turn into a long term gain

Kathleen Rowland said...

Linda, I have learned much reading your well researched post on our California crisis. Thanks!

pattinase (abbott) said...

Ain't it a bitch?

Beth Yarnall said...

Great post. Why can't the rest of us get paid for not doing our job?

Linda McLaughlin said...

You're right, Patti, it's a bitch.

Beth, LOL, as a freelance writer, I'd just like to be paid better for _doing_ my job. :)

Barrie said...

Quite frankly, it's frightening living here. Budget-wise, that is.

Linda McLaughlin said...

It's scary everywhere, Barrie. Hope we have a budget soon.