For the average citizen, California’s budget debacle is providing tremendous insights into some of the reasons California faces such a difficult task in digging its way out of a massive budget hole.
Example 1A, political influence of the unions. Today the LA Times takes a look at how California’s budget crisis has opened a rift between unions and Democrats. One of the more intriguing quotes from the story was this:
The union leaders say they are appalled that Democratic leaders are talking openly now about decimating government programs without first making a stand for bigger, broader tax hikes that could substantially offset budget cuts.
Apparently the unions weren’t part of the majority electorate that rejected Propositions 1A through 1E on May 19th. Propss 1A through 1E would have increased taxes by $16 billion and were defeated by a nearly two-to-one margin.
Despite the defeat, the the American Federation of State, County and Municipal Employee Union is circulating pledge forms to lawmakers that might have attracted takers in budget battles past. The union wants the legislators to sign statements of support for up to $44 billion in new or higher taxes on the wealthy, oil companies, tobacco and other industries, products and people.
The story is a vivid demonstration of how the Capitol’s usual political alliances – which some argue have helped wrought the current fiscal climate – are being tested by the state’s severe financial problems as interest groups scramble to hold onto as much as possible of the state’s shrinking coffers.
The other side of the story is pointed out by Reason Online. The free market think tank believes that finding places to cut costs without reducing the state to post-apocalyptic squalor is not the difficult task some lawmakers would make out to be. As explained in California’s political newspaper Capital Weekly last week:
[N]ew revenue estimates released by the Department of Finance this week place the state’s general fund revenues at $85.9 billion—nearly $4 billion higher than they were just five years ago.Even with the depleted funds caused by plunging home prices and a global economic slowdown, Gov. Schwarzenegger’s budget is still larger than his first budget in the 2004-05 budget year.
But in that first budget year, state spending was at $79.8 billion. Over the next two years, state spending jumped by more than 21 percent, to more than $101.4 billion in the 2006-07 budget year.
The world politic is not everyone’s cup of tea. However, as the current budget battle continues to unfold – for the average concerned taxpayer – it will provide new insights into the realities of Calfiornia politics.