Citizens' Budget

With the State of California in the hole about $30 billion, the Reason Public Policy Institute has released a detailed plan for turning that deficit into a surplus by 2005 -- without raising taxes.

Comments

[Seth D. Michaels]

Just a side note - however big you think the state government of California should be - and you and I likely disagree - it's worth noting that the market manipulation by power companies during the "energy crisis" cost the state about $45 billion, and probably a decent amount in local/county budgets as well.

[Steve]

Seth,

Regardless of any malfeasance that took place on the part of power traders, California got its own bad self into that problem. Had they built the capacity they needed (like the utilities were SUPPOSED to), none of that would have happened.

A little off topic, but relevant.

[James Merritt]

Seth: I freely admit that I think state government should be a lot smaller than even the 1998 incarnation. Even so, I would view it as a backhanded victory of a sort, if we could just see the 1998 level plus the amount of sustainable growth tha tthe state has "earned" since then as a "necessary correction" rather than as a "budget deficit crisis" that requires "draconian cuts."

The power "deregulation" that was foisted upon us by the legislature (believe me, as much as I favor true deregulation, I would have voted against that fraud, had it been an initiative proposition on the ballot), was instead a distorted "alternative regulation" scheme that ignored market forces and pradtically invited predatory market-fixers to come take our money. I want to emphasize that NONE OF THIS would have been possible, without the enthusiastic participation of government and its implicit threat of force.

To really screw with the people, you have to corrupt the public guardians. So, the guardians must always be only as powerful as necessary to deal with true threats, and never so powerful that they can be turned into threats to oppress the entire people after skillful manipulation by the power hungry. Unfortunately, I think the State of California crossed the line some time ago.

Ask yourself: has big government ever helped society as much as the eventual large-scale abuse of big government -- not to mention the overhead cost of its sheer bulk -- has hurt?

I worry about constitutional amendments, as proposed by the Reason Institute, for example, because they have the effect of turning the government into a rigid machine (three strikes and mandatory sentencing, anyone?). Government is a group of people. Voters need to focus on putting good people in office, because past experience suggests that they will be sorely disappointed by any "mechanical" government, whether administered by machines, or by human bureaucrats following thick rule books that allow no room for human flexibility. As imperfect as people are, if we replace them with robots, or do everything we can to turn them into robots, then we really are screwed.

[Floyd McWilliams]

It's a common donkey talking point to say that energy "deregulation" cost the state some large amount of money. Even if we assume the veracity of that statement for the sake of argument, there is a big difference between costing energy consumers $45 billion, and reducing the amount collected by the Franchise Tax Board by $45 billion.

[Mr. Stinker]

"...and includes a line-by-line analysis of the state budget that reveals nearly $16 billion in potential cost savings in state programs."

That will be $16B that bureaucrats won't get. And what about the deadbeat companies that eat from this slop bucket? They need money too!

Happy May Day.

[James Merritt]

What's truly sad about the whole "state budget deficit" mess is that the trend in sustainable state revenue since 1998 (i.e., not counting the windfalls of the dot-com bubble years) has been upward. By the governor's own figures and estimates (available at http://www.dof.ca.gov/HTML/BUD_DOCS/Bud_link.htm), the state will bring in $15 billion more in total revenues than in 1998 (the last, pre-bubble year); that amount includes a $7 billion increase in the general fund over 1998.

Had the bubble never occurred, revenues would still have marched steadily northward every year since 1998 -- by BILLIONS. And the dot-com revenue spike was an additional windfall of BILLIONS. Yet the state seems to have spent it all and then some.

It seems clear to me that, unless the state just out-and-out burned those billions in a bonfire (always a possibility, I'll admit), many of the "draconian cuts" feared by the chicken littles here are merely readjustments to sustainable levels of INCREASE over 1998 funding. Mind you, nobody except the wildest, profligate spenders (OK, I guess that means nearly everyone in Sacramento 😉 thought that state government was too small and needed to spend billions more in 1998. Even if we cut all the way back to 1998 levels, why would such cuts be "Draconian"? To use that word to describe the minimum fiscal discipline we need to employ in this situation is simply a case of langauge abuse (also a staple in Sacramento, I concede).

In any event, the Reason Institute prescription, while encouraging, worthwhile, and likely to be effective if implemented, is merely a bandaid on the situation, which does not address the real problem: the legislature and the governor don't have either the willpower or the intelligence to quit spending! The most important thing to do, in my opinion, is therefore to toss most of those guys out of the capitol and at least give a fighting chance to people who believe in (and who have shown they UNDERSTAND) fiscal responsibility.

I can't say that I have much admiration for the GOP members of the legislature, or their recently publicized take on the budget mess, so I am certainly not advocating that we toss the Demos and sweep in the Republicans. I am willing to allow that members of both the Demos and GOP could qualify as fiscally responsible and competent, but each candidate needs to be treated as an individual and evaluated for his or her own views and skills. A more likely source of fiscally responsible officials would be the ranks of independent or Libertarian candidates. I certainly hope the state LP can help publicize the Reason plan, and can use it along with other libertarian-oriented prescriptions to get the serious attention of the voters this November and in 2004. As long as we keep sending free-spending idiots to Sacramento, we'll come right back to the bad place where we stand today, which even the technical and structural approaches advocated by the Reason Institute will eventually be unable to prevent.

[Rick Barton]

Hey Reason Institute; Could you please do the same thing for the federal government. Those folks are quite out of control as well.

[Andy Freeman]

CA's 2000 spending fits is less than its 2003 revenues....