LAT Columnist: State Spending Problem a "Myth"…Unless You Count All State Spending


In today's installment of You Californians Are Just Too STUPID, L.A. Times anti-business columnist and recovering sock-puppetteer Michael Hiltzik thunders: "California's problem is spending? That's a myth." Hiltzik's case:

[T]he idea that California's budget has been out of control as measured against inflation and population growth is a deeply cherished talking point in the debate over the state's fiscal deficit.

Unfortunately, it turns out to be yet another infectious myth. The truth is that over the last 10 years, California's spending has tracked population growth and price increases almost to the penny.

This finding comes from the nonpartisan legislative analyst's office, which subjects the state budget to more careful scrutiny than almost anyone else in Sacramento.

Analyzing the 2008-09 budget bill last year, the legislative analyst determined that since 1998-99, spending in the general fund and state special funds—the latter comes from special levies like gasoline and tobacco taxes—had risen to $128.8 billion from $72.6 billion, or 77%.

During this time frame, which embraced two booms (dot-com and housing) and two busts (ditto), the state's population grew about 30% to about 38 million, and inflation charged ahead by 50%. The budget's growth, the legislative analyst found, exceeded these factors by only an average of 0.2% a year.

What's missing from this analysis? Hiltzik cops to it a few paragraphs later: Bond spending. Which, as he quotes the state legislative analyst as saying, has amounted to $85 billion in voter-mandated issuances this decade alone.

In what universe does "bond spending" not count as "spending"? Does this mean I am not technically spending when I buy stuff with my credit card? If a "deeply cherished talking point" turns out to be true, can it still be "infectious"? These are the questions.

To see what an honest and complete accounting of California budget data over the past two decades looks like (hint: the phrase "almost to the penny" is not used), consult the Reason Foundation's study [PDF] "California Spending By the Numbers."

UPDATE: The San Diego Union-Tribune's Chris Reed has found what he calls a "Huge, obvious error" in Hiltzik's calculations of population growth.