Gimmicks won’t fix state budget

The state on average takes $9 out of every $100 of personal
income of California residents.
The state on average takes $9 out of every $100 of personal income of California residents. You’d think with this kind of money that the governor and legislators could easily turn in a balanced budget and provide Californians with a proper level of government services. But fiscal responsibility and restraint have been low on the agenda for the Democrats and even some Republicans in Sacramento.

The present state budget of $98.9 billion had $23.6 billion in red ink. Politicians “erased” it by borrowing, raising revenues and fees, and making some cuts. But gimmicks such as relying on future dollars from a national tobacco settlement are one-time ploys that do nothing to solve the state government’s long-term financial headaches.

And guess what? It now looks as if lawmakers did such a poor job of papering over the 2002-2003 budget – signed a record 67 days late on Sept. 5 – that just two months later the state is facing a $6.1 billion deficit for this year. Left unchecked, the state budget for the next fiscal year will have $21.1 billion in red ink, according to the nonpartisan legislative analyst Elizabeth Hill.

Ms. Hill’s report indicates that the state’s general fund budget also could have a deficit of between $12 billion and $16 billion for the following six years. Those shortfalls probably will happen even if the economy stages a rebound.

“There is no easy way out of this predicament,” she says. A start would be for Mr. Davis and the Legislature to realize they can no longer tax or borrow their way out of this crisis. Stealing from the future is bad for California’s long-term financial health. It also is unfair to future generations who will have to pay for undisciplined spending habits of today’s politicians.

Next, Mr. Davis and the Legislature will have to realize they can’t use as an excuse that the high-tech meltdown and post-Sept. 11 economic free-fall are responsible for the budget mess this year and for years to come. Under their watch, the state used windfall dollars to increase spending. They refused to take significant measures to trim back expenses when these dollars disappeared. No more tax hikes. No more fee increases. No more loans. Californians instead need Mr. Davis and the Legislature to get serious about returning the state budget to levels of just a few years ago.

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