California's Budget: Balanced or a Punt?

Last week the State Legislature approved a $91 Billion FY2013 (7/1/2012 - 6/30/2013) General Fund budget, which includes increased General Fund spending of over $4 billion dollars.  While many government agencies are reducing spending, the State of California proposed budget actually increases spending.

As part of this budget, the State is assuming that voters will approve a $9 Billion tax increase in November.  Even though Statewide tax increases have failed the last eight times they've gone before the voters, and voters rejected similar tax hikes by a two to one margin in 2009.  However, this time they are proposing “trigger cuts” which means that our educational system will bear a disproportional share of the expense reductions if voters don’t pass the tax increase.

One of the items the State Legislature didn’t address – one of the most significant financial problems the State has – was reforming the public employee pension system.  No action has been taken on Governor Brown’s 12 point plan to reduce pension costs.  According to the Stanford Institute for Economic Policy Research, it costs California taxpayers $3.4 million every day that the State Legislature delays taking action.

What do you think?

• Do you think voters will approve the Governor's proposed tax increase this November?
• Do you think the proposed "trigger cuts" are intended to scare voters into approving higher taxes?

Due to past decision making by the State Legislature, following is what has occurred in California over the last decade:

1. Highest Sales Tax in the Nation

I believe the State should be doing the following:

First, the State should learn to live within its means, just like you and I do every day.

Second, the State should reduce their expenses in an ongoing, structural way.  Currently, the legislature is using "one-time" revenues to pay for current operating expenses.  Basically, this means they are borrowing from the future to pay today's expenses, which will result in a reduced standard of living in the future for all of us, and especially our children.

Third, the State needs to improve the business climate in order to support  economic growth.  A growing economy will not only create opportunities for all Californians, but will also create more tax revenue for all levels of government.  If we can get our economy growing again, tax increases on Californians won’t be necessary.

Learn more budget facts at CaBudgetFactCheck.org.

I welcome your opinions and look forward to your comments.