Government Spending

Fiscal Responsibility Never Reigns in California

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California, finally, has passed its lousy new budget.

"This is a very difficult budget, but we have turned this crisis into an opportunity to make real, lasting reforms for Californians," [Gov. Arnold Schwarzenegger] said in a written statement. "Some special interests may not like this budget—but like I always say, what's good for the people is not always good for special interests."

"Real, lasting reforms"? I recall similar hot air from Schwarzenegger five years (and $40 billion in state budget increases) ago. There's much less reason to believe it now.

For a more comprehensive look both at real reform and the flagrant government irresponsibility that has brought the Golden State to the brink, I'll direct everyone's attention to a brand new study by Adam Summers and the Reason Foundation, "California Spending by the Numbers: A Historic Look at State Spending from Gov. Pete Wilson to Gov. Arnold Schwarzenegger" [pdf]. Here's one of many excerptables:

A good rule of thumb in government budgeting is that the rate of spending increases should not exceed the rate of population growth plus inflation. For the period under examination here, the state's population increased at an annual rate of 1.38 percent, and the California Consumer Price Index rose an average of 2.99 percent a year. The combined total of 4.3811 percent a year is easily outpaced by the 5.37 percent average annual increase in General Fund spending.

California's last three governors have not fared so well by this metric. Gov. Pete Wilson managed best, holding average annual spending increases to 4.88 percent, compared to population plus inflation growth of an average of 3.72 percent a year.

Under Gov. Gray Davis, spending rose an average of 6.73 percent a year versus population plus inflation growth of 4.83 percent.

Spending has grown slightly higher under Gov. Schwarzenegger

Whole thing, well worth a read, here.