The California Clockwise Swirl
So California is in debt again. You’ll note that not a lot of people are talking about the fact that the real problem was that the state didn’t collect nearly enough tax revenue in comparison to what it anticipated. Gee, I wonder why? Victor Davis Hanson (alwasy a great read) has a good starter theory.
To sum up why California has yet another deficit — this time a $16 billion whopper — is pretty easy: The number of demonized one-percenters who pay over 10 percent in their salary to the state has been shrinking, as thousands flee with their ideas, energy, business, and capital to nearby no-tax states, and others make less money due to more and more costs and regulations — while the number of those receiving all sorts of state housing, food, medical, education, and legal support is soaring.
Big bad Texas seems to be doing really well these days, despite everyone thinking that Rick Perry is just a failed Republican candidate for president. Maybe if we voted on results he and Mr. Romney would still be battling it out. Then again, if we went on results, Mr. Romney would be President Romney already after beating a forever-term senator and a neophyte politician four years ago… so never mind.
Back to California. The cuts being proposed really aren’t cuts yet. The state budget proposed is still growing from last year as far as I can tell. Sure, state workers might have to take an apparent cut in hours (though I doubt it), or perhaps they’ll threaten to cut school lunches, but the machine that is the state government will continue to grow. I do note that the new budget, for instance, still funds the high-speed rail project from the middle of the state to the middle of the state, with all the ancillary support.
If you read that Chronicle article above, you’ll note that most of the proposed cuts are pretty obvious ones, but also ones with a sympathetic face to them. Cutting nurses or de-funding improvements to the court system aren’t hard cuts. They’re commercials for raising taxes more. Re-negotiating school pension programs like Wisconson did would be a step, but the lack of sympathetic union faces and the likely influx of unbathed protesters in the legislature is probably daunting.
I still don’t see the state trying to completely rethink the budget. And while that happens, we’ll see more wealthy people find ways to hide income or move out of state while Sacramento burns.
This is all bad for America, by the way. The tech industry is fueled by the innovation in Silicon Valley. Sure, we’ll continue to see growth outside the bounds of the Bay, but China and others are getting a leg up funding their own internal growth while America watches California mis-spend itself down the drain.