By Chic Hollis – Philosophical Musings
The registered voters in the Golden State decided some time ago that 66+% of the members of our state legislature must agree about how tax revenue ought to be spent. Petitioners behind Proposition 25 disagree. They believe that 50+% of any legislature is a wiser group of responsible adults. Who could disagree with them? Consequently, voters are being asked to reduce the two-thirds majority requirement to approve a budget to a “simple majority.” Or a majority of simpletons?
How many serious people in this nation believe that governments should be allowed to spend more that their collections of taxes, fees, etc.? If you are one of those, don’t read any further. The perennial problem of balancing the budget here in California is really quite simple to resolve. However, the process of doing that is undermined by the fact that no one wants to cut spending or increase taxes when there is a deficit that exceeds revenue and reserves!
The budget for fiscal year 2011 that began July 1, 2010 was not approved for 100 days, a record postponement for accomplishing that feat! The local newspaper explained only $8.6 billion of the proposed legislative actions to eliminate the projected $19 billion deficit. Of that $8.6 amount, $4 billion of unapproved federal funds was included, and $2 billion of expenses were to be pushed into July 2011. Journalists who understand the rules that pertain to the state budget game call those flimsy assumptions “smoke and mirrors.”
When the authorities responsible for paying school expenses found out that they were to push into next year $1.7 billion of the $2 billion total, they squawked to the journalists, “Hold on! According to the Department of Finance there are already $7.4 billion of unpaid deferrals from prior postponements!” After delaying 100 days before producing a “balanced budget,” the legislature apparently forgot about or chose to ignore past commitments! The local newspaper this week had the following alarming headlines: “Pension Costs could Swamp Tax Revenue” and “Unemployment Benefits Fund is Billions in Debt.”
The question really isn’t whether a two-thirds majority or a simple majority ought to approve how the state’s revenue is spent, it’s about honestly balancing a budget that all states in the U.S. legally must do each year in order to avoid bankruptcy. “Seems elementary, my dear Watson!” But it isn’t because the lack of ethics of those elected officials in Sacramento allows them to shirk their responsibilities.
Their message is: “We don’t have to submit a balanced budget on time. We don’t have to legitimately balance a budget. And we don’t have to abide by federal law that expects a state to honestly balance its budget.” Of course, if enough citizens don’t like such an obnoxious attitude, they can vote the spendthrifts out of office. But that never happens in California!
But who cares? These practices have been going on for years: late budgets, deficits at year end, IOUs, and “fudging the books.” Will a simple majority of irresponsible legislators perform better? Why should serious citizens assume that? What difference does it make to voters as long as they continue to get their benefits from the state before the elected and appointed officials are compensated for their legislative incompetence?
If two out of three members of the legislature approve a budget full of accounting gimmicks, unrealistic assumptions, and smoke and mirror solutions for the lack of revenue, how much more honest will one out of two rascals be when it comes to splitting up the revenue pie? Does any intelligent voter believe that there is a proper mix of unscrupulous legislators who will do what is expected of them? Federal government laws are full of inequities. The fringe benefits granted and wage increases given to federal government employees are just two examples of the discriminatory practices of our federal government!
When the governor of California signed the 2011 budget document he demonstrated his lack of fortitude in insisting that the legislature produce a truly realistic budget. So, let’s all go vote on November 2nd and support this failing democratic system – pretending that things will change in Sacramento.
In the meantime, put away a little something on pay day to cover the tax, fee, and fine increases that are bound to follow soon, unless you live below the poverty level already or you are planning to have a multiple birth in your immediate family soon!
Oh, I forgot to mention. One of the recent revenue improvements in California was the reduction in the amount of the deductible authorized by the state for a dependent in calculating the amount of state income tax due. The deductible decreased significantly from $285 per dependent to $98 last year. Are you smiling yet? That smile won’t last long.
If you work for some agency of the state government or the school system in California, be prepared to the bad news that thanks to the Great Recession and Wall Street greediness the state pension funds are grossly underfunded. Unlike Social Security which is a legal Ponzi scheme, state pension fund managers put the money for pensions into supposedly sound investments. The lack of money to pay pensions is something a simple majority or a two-thirds majority better step up and do something about very soon!