Friday, November 12, 2010

Sac Bee

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Dan Walters

Dan Walters
Dan Walters: Schwarzenegger hands off huge budget deficit to Jerry Brown


By Dan Walters The Sacramento Bee
Published: Friday, Nov. 12, 2010 - 12:00 am | Page 3A

Arnold Schwarzenegger came into the governorship seven years ago on a pledge to end "crazy deficit spending."As he exits in January, however, he will leave behind a budget deficit that's just as bad, and perhaps even worse, than the one he inherited from predecessor Gray Davis. And regardless of what else he may have accomplished, that will leave an indelible stain on his gubernatorial record.The Legislature's budget analyst, Mac Taylor, calculates that the sham budget Schwarzenegger and legislators enacted scarcely a month ago – 100 days late, by the way – is already about $6 billion out of whack, largely because its rosy revenue assumptions and its other gimmicks are collapsing. Furthermore, as the nearly $9 billion per year in temporary taxes that Schwarzenegger and the Legislature imposed last year expire, and as the state's economy continues a slow – at best – recovery from recession, the state is looking at annual shortfalls in the $20 billion range for years to come, Taylor noted.Jerry Brown, the ex- governor who will succeed Schwarzenegger in January, will be fighting budget wars at least through his first four-year term unless he can create a permanent fix – new taxes and/or big spending cuts – early in his new governorship.He'll be fighting them mostly with fellow Democrats, because Proposition 25 gives them the power to pass a budget without Republican votes.Simply put, Democrats now own the budget, and unless they can find a way to raise taxes, or at least retain those soon-to-expire temporary taxes, they'll be the ones who will be cutting money cherished by their political allies, such as public employee unions and welfare and health care recipients.How about just dreaming up more gimmicks like those now backfiring? Capitol politicians have been scraping the bottom of the gimmick barrel, and even the opportunities to make real spending cuts have been shrinking.The new federal health care program, for instance, makes it much more difficult to reduce health programs for the poor. Indeed, the state will be saddled with new costs as the program is fully implemented.Brown has pledged that he would not raise taxes without voter approval. Chances are he couldn't anyway, since tax hikes would take at least some Republican votes in the Legislature. And he also says he wants to explore cost-cutting avenues before considering taxes.However, the sheer size of the deficit, not only now but in the future, probably means that sooner or later – sooner, most likely – Brown and the Legislature will be begging voters for more revenue, no easy thing coming out of the worst recession since the Great Depression. And even were they able to persuade voters to extend the temporary taxes, that would cover less than half the projected deficit. © Copyright The Sacramento Bee. All rights reserved. Share

One of these days they're going to start collecting. And if the Federal Government loans them too much money and doesn't get it back, they could bankrupt the Government! This is why they were so scared to let the city go bankrupt because too many banks would fail that hold bonds and stuff.

Too many businesses would fail, people would fail, just like a row of dominoes, they'd collapse right on down the line including banks in other cities and they'd even have repercussions in Europe if Californian went bankrupt.
Ted Rudow III,MA

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