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The Late, Great Golden State (07099) by J. F. Kelly, Jr
A commentary by J. F. Kelly, Jr.
“California’s cascading crises prefigure America’s future unless Washington reverses the growth of government subservient to organized labor.” -George F. Will
California isn’t alone as a state with budget shortfalls but, as in so many other categories, it leads the way. Its dysfunctional state government is unable to resolve the shortfalls and balance its budget as the state constitution requires. Governor Arnold Schwarzenegger, having threatened to veto any solution that raises taxes, has, at this writing, been unable to broker a compromise between Sacramento’s warring political factions.
As a consequence, the state has begun for the second time in its history to issue IOUs to some of its numerous creditors and welfare recipients. There were questions regarding whether or not some financial institutions would honor them or for how long. The IOUs, or warrants, will bear interest, adding to the state’s huge deficit, further damaging its credit rating and increasing its cost of borrowing. By the way, don’t try paying your estimated tax bill by writing an IOU. It doesn’t work that way.
The cause of the state’s budget woes is clear enough: profligate spending as usual combined with greatly reduced revenue owing to the economic downturn and California’s sinking economy. Free-spending state legislators continue to grow public spending as if the good times had never ended. But they have. Businesses have abandoned the Golden State to seek relief from its high taxes, anti-business culture and steep cost of living. California ranks first and second, respectively, among states with the highest income taxes and sales tax rates in the nation.
As columnist George Will recently noted, one quarter of the state’s revenue comes from income taxes paid by a mere 144,000 affluent taxpayers. When some of them get fed up and leave, California has a big problem. Tax policies which soak the rich work only until the rich decide to relocate to tax-friendlier states.
Another major problem is the state’s out-of-control ballot referendum process. Its legislators refuse to tackle the tough issues they were elected to deal with so activists gather enough signatures to get them on the ballot as propositions. They then mount extensive propaganda campaigns which blatantly distort the issues, using deceptive media advertisements. Even the ballot language can be misleading.
Unfortunately, many voters are taken in by the hype and demagoguery and vote for changes without fully understanding the consequences or fiscal implications. Too often these are very different from what they thought they were supporting and the results impact the budget forever unless overturned by the courts or another referendum.
Proposition 98, for example, approved by the voters, requires that a fixed percentage of revenue go to education. It sounded reasonable. Who’s against education? But California spends plenty on education and the more it spends, the worse the results seem to be. The state’s elementary students rank 46th, 48th and 49th, respectively in math, reading and science among the fifty states. The education lobby’s solution never changes: more money.
Democratic legislators fiercely defend the education spending and many criticize Proposition 13, another voter initiative, which caps property tax increases. But Proposition 13 was approved by angry taxpayers to prevent Sacramento from relentlessly taxing seniors and others on fixed incomes out of their homes. Proposition 98, on the other hand, mandates a set percentage of revenue for education, in good times or bad, and regardless of the need for the funds or the results obtained by their expenditure.
Something must change in Sacramento because the current system is not working. Checks and balances are desirable but deadlock is not. Nor is the degree of influence which the state’s teacher and public employee unions wield. Democrats argue that a solution should involve eliminating the supermajority requirement whereby a two-thirds majority is required to approve a budget and most tax increases. But that would be no solution at all. The supermajority requirement is the only thing that keeps taxes from exploding altogether. A simple majority of as little as one vote may sound terribly democratic but not when it takes so little to raise everyone’s taxes.
California citizens deserve better, but basically, they will get the kind of government they vote for. Fixed percentages of revenue should never be established for anything. Each budget process should be an exercise in analyzing the need for all spending. That’s what legislators are paid to do. If they can’t, they shouldn’t be paid. And budget shortfalls should then be resolved by automatic horizontal reductions across all budget categories including education.
Copyright 2009 by J. F. Kelly, Jr.
“California’s cascading crises prefigure America’s future unless Washington reverses the growth of government subservient to organized labor.” -George F. Will
California isn’t alone as a state with budget shortfalls but, as in so many other categories, it leads the way. Its dysfunctional state government is unable to resolve the shortfalls and balance its budget as the state constitution requires. Governor Arnold Schwarzenegger, having threatened to veto any solution that raises taxes, has, at this writing, been unable to broker a compromise between Sacramento’s warring political factions.
As a consequence, the state has begun for the second time in its history to issue IOUs to some of its numerous creditors and welfare recipients. There were questions regarding whether or not some financial institutions would honor them or for how long. The IOUs, or warrants, will bear interest, adding to the state’s huge deficit, further damaging its credit rating and increasing its cost of borrowing. By the way, don’t try paying your estimated tax bill by writing an IOU. It doesn’t work that way.
The cause of the state’s budget woes is clear enough: profligate spending as usual combined with greatly reduced revenue owing to the economic downturn and California’s sinking economy. Free-spending state legislators continue to grow public spending as if the good times had never ended. But they have. Businesses have abandoned the Golden State to seek relief from its high taxes, anti-business culture and steep cost of living. California ranks first and second, respectively, among states with the highest income taxes and sales tax rates in the nation.
As columnist George Will recently noted, one quarter of the state’s revenue comes from income taxes paid by a mere 144,000 affluent taxpayers. When some of them get fed up and leave, California has a big problem. Tax policies which soak the rich work only until the rich decide to relocate to tax-friendlier states.
Another major problem is the state’s out-of-control ballot referendum process. Its legislators refuse to tackle the tough issues they were elected to deal with so activists gather enough signatures to get them on the ballot as propositions. They then mount extensive propaganda campaigns which blatantly distort the issues, using deceptive media advertisements. Even the ballot language can be misleading.
Unfortunately, many voters are taken in by the hype and demagoguery and vote for changes without fully understanding the consequences or fiscal implications. Too often these are very different from what they thought they were supporting and the results impact the budget forever unless overturned by the courts or another referendum.
Proposition 98, for example, approved by the voters, requires that a fixed percentage of revenue go to education. It sounded reasonable. Who’s against education? But California spends plenty on education and the more it spends, the worse the results seem to be. The state’s elementary students rank 46th, 48th and 49th, respectively in math, reading and science among the fifty states. The education lobby’s solution never changes: more money.
Democratic legislators fiercely defend the education spending and many criticize Proposition 13, another voter initiative, which caps property tax increases. But Proposition 13 was approved by angry taxpayers to prevent Sacramento from relentlessly taxing seniors and others on fixed incomes out of their homes. Proposition 98, on the other hand, mandates a set percentage of revenue for education, in good times or bad, and regardless of the need for the funds or the results obtained by their expenditure.
Something must change in Sacramento because the current system is not working. Checks and balances are desirable but deadlock is not. Nor is the degree of influence which the state’s teacher and public employee unions wield. Democrats argue that a solution should involve eliminating the supermajority requirement whereby a two-thirds majority is required to approve a budget and most tax increases. But that would be no solution at all. The supermajority requirement is the only thing that keeps taxes from exploding altogether. A simple majority of as little as one vote may sound terribly democratic but not when it takes so little to raise everyone’s taxes.
California citizens deserve better, but basically, they will get the kind of government they vote for. Fixed percentages of revenue should never be established for anything. Each budget process should be an exercise in analyzing the need for all spending. That’s what legislators are paid to do. If they can’t, they shouldn’t be paid. And budget shortfalls should then be resolved by automatic horizontal reductions across all budget categories including education.
Copyright 2009 by J. F. Kelly, Jr.
Tags: current events, politics
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Comment by Jim Desai on July 11, 2009 at 11:15am -
Trying to "buy" a good education is like trying to "buy" love or respect or friendship. The most important prerequisite for a good education, is a desire to learn, a, stable home environment, and parents as positive role models. These things,,,, money can't buy.
As for our overall budget crisis, the two biggest expenses are entitlement programs, (welfare for the middle class) and military (spending trillions of dollars to buy millions of enemies). Unless these two items are tackled, no amount of postulating will work.
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Comment by becky barb on July 11, 2009 at 4:53pm -
To Steve Johnson:
Being a newbee to ecoronado, I wanted to tell you just how much I enjoy your website!
Most of all, I wanted to THANK YOU for carrying Capt. Kelly's commentary. He is a bright and ensightfull man, who speaks for mainstream America. His thirty years of service for our freedom should be applauded. Hopefully, he will enspire more Americans to serve their country.
It's a tragedy his view aren't carried nationwide like Ann Coulter, Rush Limbaugh, and Michael Savage.
Well, enough politics already, keep up the good work Steve.
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Comment by Jim Desai on July 11, 2009 at 9:43pm
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Ouch !
Being compared to Ann Coulter in a public forum! Poor Kelly, I am sure it hurts him more than the swine flu.
Ann Coulter is our American version of Yasser Arafat. They both have the same loony eyes.
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Comment by Pamela on July 11, 2009 at 11:56pm -
Kelly's commentary does NOT represent mainstream America--haven't people figured out that the mainstream is not white, privileged and republican? Rush Limbaugh? A travesty--and he certainly doesn't speak for me or anyone I know! I won't even go there about Ann Coulter...
Mr. Kelly's posts are always good to get me riled up just when I am starting to enjoy myself in our lovely town:
"As columnist George Will recently noted, one quarter of the state’s revenue comes from income taxes paid by a mere 144,000 affluent taxpayers. When some of them get fed up and leave, California has a big problem. Tax policies which soak the rich work only until the rich decide to relocate to tax-friendlier states."
This is twisted logic--I think the affluent taxpayers are in CA because they want to be here. How many of those 144k people are Hollywood celebrities with houses in Malibu? Can't get that ocean view in business-friendly South Dakota! And I bet those 144k people get great tax advice on how to write off most of their tax obligations.
Let's not kid ourselves: the people being hurt by this tax climate are not the affluent--they will be fine as they always are. The middle class are the ones being squeezed---as they always are. The working poor, the enlisted, the two income families who still can't afford basic necessities.
As for Califoria's referenda system, I agree, it's preposterous. The average citizen does not have the time or the initiative to investigate each proposed referendum and make an intelligent decision. It's mob rule, one of the primary concerns of our founding fathers (thus the now-maligned electoral college used in presidential elections). But I am confounded as to what basis you prefer for Prop 13 over Prop 98? So seniors should be protected from rising property taxes (despite the fact that many homeowners, including seniors, took out 2nd and 3rd mortgages in the housing bubble to fund vacations, new cars, remodels, etc but never had to pay the government more than what they paid in 1985 despite skyrocketing property values?!) but the budgets for children's education shouldn't be guaranteed? I don't believe in throwing good money after bad, but schooling for the coming generations is a serious concern to ensure our country's future and global competitiveness. Perhaps spending should be analyzed and re-directed, but you can't believe that schools with leaky roofs and no heat in winter are good learning environments?
Let me ask you this: are any of us willing to give up any benefits from the government that you can do without? Why are wealthy retirees still receiving social security payments and Medicare? How about those who receive a military pension and a private pension (double-dipping)? Are those people willing to give up those benefits in order to help our country's deficit? Do you see that some people can't even make that choice--that our state's teachers need every penny they earn--that every dime is spent on their modest homes and basic sustenance. Taxes from the rich providing basic needs to the poor is the basis of a progressive society.
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Comment by Jim Desai on July 12, 2009 at 11:35am
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Well said.
Kelly's commentary is polarizing, divisive, and frankly unAmerican. But it is permissible; and probably necessary; in our free society so long as mainstream America gets to state its disclaimer, and reiterate that he speaks for a very few Americans. Therefore I don not have any problem with him posting in this forum. In fact I welcome it, so that I can debunk his "us v/s them" ideas.
The problem however lies with the Coronado Eagle Journal, which publishes his views exclusively, and brazenly ignores mainstream American views. This gives the mistaken impression that all Americans think like Kelly (Lord forbid) and also gives vested interests here and abroad and opportunity to continuously rebroadcast these views and artificially create a distorted "Dr. Goebbels" view of America, and Americans as people who manipulate and exploit vulnerable folk all over the world, for selfish reasons.
I am an ordinary American citizen. I neither wish to exploit anybody nor manipulate anybody; and I don't appreciate being accused of these acts. I may be a Coronadan/Californian/Republican/Union lover/Union hater/white/black/latino/////// etc, but I am an American first and foremost. America's problems are my problems, whether they be in California or Montana. There is no us and no them. We are in this leaky boat together. Let us dump Kelly-ism overboard, and work together to improve America...all of America.
I hate labels, but if I am to be labeled, I proudly prefer the American label.
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Comment by Pamela on July 12, 2009 at 12:28pm
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Agreed, Jim.
I applaud debate and believe there's room at the table for all viewpoints--even the kooky ones. But let's not assume that any one viewpoint speaks for all and that disagreement and reasonable differences of opinion are "unamerican" or "unpatriotic." The Federalist Papers show that the most patriotic of our nation's thinkers engaged in vigorous debate over the basis ideals on which our nation was formed. I don't want to see our country slip into propagandism and simple-mindedness because the issues are too big and complex to put into soundbites and newspaper columns.
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Comment by Jim Desai on July 12, 2009 at 2:05pm
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unAmerican v/s unPatriotic.
These terms generate a lot of confusion in American minds. One does not imply or preclude another.
unAmerican, simply means, contrary to the views of mainstream America at this time and place.
Unpatriotic means something quite different, negative and unworthy. One must be careful not to use these terms interchangeably or confuse one with another.
There are a whole bunch of decent Americans who are amazingly at odds with the fundamental principles that govern our nation. That does not mean they are unpatriotic: They are simply unAmerican... and God bless them one and all.
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Comment by Jim Desai on July 12, 2009 at 2:16pm
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PS
A very good example of this dilemma; are the current revelations about the massive Bush program spying on all Americans. The people who authorized this, and the people who carried it out, had the laudable goal of protecting America. A laudable patriotic goal. Was it in synch with the basic guarantees of our constitution? Heck no. Was it patriotic? Yes the motives probably were. Are Americans comfortable with going down the slippery slope of circumventing our constitution, and spying on each other? I doubt it.
unPatriotic------No.
unAmerican-----definitely
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Comment by Pamela on July 12, 2009 at 10:56pm
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Good distinctions. Such words are typically defined by those who are using them. For 8 long years, any sort of probing or informed questioning about decisions, policies, plans and rationale was deemed unpatriotic--as if an administration could be infallible! The hubris! I agree, you can be unpatriotic and be American, and be unamerican and be patriotic--but the two have tended to be used synonymously and I agree that this is erroneous. I am an inclusive personality and I welcome all rational viewpoints--there is something to be learned from everyone.
The widespread spying on Americans will never fall into the patriotic category for me...defending the constitution (with the illegal search and seizure clause) is the job of those sworn into office. Warrants are fairly easy to obtain under procedures meant to be time responsive. I think time will show that the wire tap program was more a political power push than legitimately useful for homeland security. It's shameful and there should be repercussions.
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Comment by Jim Desai on July 13, 2009 at 12:47am
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George Santayana said "Those who don't learn from history, are condemned to relive it."
History is full of instances where politicians have taken advantage of a Nation's pain and suffering (as after 9/11) to grab more power and advance their private agendas.
Surrender your freedoms to me and I shall protect you.
It is the same old lie, just new victims.
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