I Really Don’t Care Much About California, But This Stunned Me (The Sequel)
Back in February, I wrote a piece called I Really Don’t Care Much About California, But This Stunned Me. The gist of it was that California politicians are so reckless in spending, taxing, and regulating that they have essentially bankrupted their own state. I didn’t really care about what they did to their state because they have a right to govern themselves and far be it for me in Virginia to tell them how to live their lives.
Well, it is getting worse. The state is truly toxic for business.
Chief Executive magazine recently found California to be the worst state in the nation in which to do business. It is business that creates jobs, provides services to the public, and pays the taxes on which the leaches in government rely.
When it comes to finances, California finds itself $26 billion in the hole while taking on more debt at $25 million a day.
The schools are in trouble; the prison system is set to release 26,000 felons; and our once proud university system is turning away qualified students. Social services are being cut, the infrastructure if falling apart, and unemployment is over 15 percent. And California has the second highest income tax rate in the nation.
People are leaving California at the rate of 100,000 per year.
Unemployment in February 2009 was 9.3%. By November it was 12.3%.
And now, California wants a federal bailout. Think about that. A state wants a bailout. We have sunk to that.
Facing a $21 billion shortfall through June 2011, California leaders want billions of dollars in budget relief from Washington that could head off deep cuts expected to state programs.
Gov. Arnold Schwarzenegger will ask the White House to waive rules that require the state to spend its own money on certain programs to receive federal funds, according to California officials briefed on the Republican’s coming budget proposal.
Such relief, combined with additional stimulus funds, could save the state as much as $8 billion in the next 18 months, the officials said.
State Senate President Darrell Steinberg, a Democrat, will visit Washington in coming months to lobby Obama administration officials and the California congressional delegation for aid.
Note the line that the bailout is needed to head off cuts to state services. In other words, they refuse to cut spending. They want their bailout so they can keep doing the things that got them into this mess in the first place.
The liberals have run the state into the ground. But instead of making the tough political decision, which is actually in their job description, to STOP SPENDING MONEY, they now plan to ask the American people in the other 49 states to give them even more money so they can take the rest of us down with them.
Now I am starting to care about California. But it is not because I am feeling altruistic, it is because their previously self-contained disaster has now spilled out into requests for bailout money from me. If I am going to be asked to bail out California, I want a right to go in and cut their spending, cut their taxes, and cut their regulations. I want to bring businesses back to ensure that I get my money back. I want to be sure that the people who got them into this fiscal situation are not permitted to make any more fiscal decisions. In short, I want all the strings that Barack Obama attached to the bailout money for the banks to be applied to California.
California is like the gin-guzzling welfare queen with her flat-screen TV and iPhone who suddenly realizes she doesn’t have enough money to put food on the table. When she comes asking for her bailout, the first thing she’s going to be be required to do is cancel the cell service and put the flat-screen on eBay. If she won’t do that, she doesn’t get a dime.
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Strangely, I find myself in a position of actually agreeing with much of what you have to say in this post – however, you aren’t entirely clear on what happened in California. The disaster was not the result of liberals or conservatives running the state into the ground. While there is a Democratic majority in both branches of the state government, they are effectively blocked by a system that requires a 2/3 vote to do anything that has to do with taxes or fiscal policy.
What really ran California into a wall was the unintended effects of Prop. 13 many years ago. Unbeknownst to most people who voted for the measure- including me – was that the propositions did not just put a limit on California property taxes (that was the good news.) The proposition also created the need for a 2/3 approval in the legislature to do anything that costs money. Because such a majority is virtually impossible to achieve, every item that involves money ends up going on the ballot for the people of California to decide.
Not surprisingly, we like it when we see what appear to be good programs proposed on the ballot and we, inevitably, vote for it. Of course, when it comes to voting to pay for these things, we don’t like that and we vote these propositions down. The result is we have all these programs and can’t pay for them.
In the case of California, we can’t even blame our legislators -whatever their political party. We have nobody to blame but ourselves and the only way this will be fixed is a State Constitutional Convention to straighten this mess out.
As for a federal bailout, I can’t say that I’m against it because I’m a Californian. But I can certainly understand why you, and everyone who does not live in California, would be very much against such a thing and I don’t blame you a bit.
Mr. Dupray,
Well I have no problem with the Fed’s putting the conditions on any bail-out of California’s budget, in fact it is a pretty good idea.
Having said that you are quite mistaken about California’s budget, it has been repeatedly cut over the last 20 years. Government employees are currently furloughed three days a month and state funded college have raised the tuition to astronomic levels. The problem is that government refuses to raise taxes.
Actually the funnest example of this the role of the “conservative” Republicans. They have been pushing successfully for longer and longer prison sentences and building more and more prisons and hiring more an more prison guards. However, they opposed any increases in taxes to pay for those prisons or guards. As a result, many prisoners are now being released far earlier than they would otherwise.
Yes it is difficult to argue that California has anything close to a functioning legislature and our leaders in this state are quite accustomed to kicking cans down the road.
This is a condition the federal congress should ponder. Prop. 13 did some considerable damage and it should be noted that it froze business property taxes as well which had a bigger impact because car dealers and supermarkets and malls don’t generally sell their property as often as homeowners. The state also took quite a hit when energy prices were deregulated and then manipulated raising costs $20 billion from 1999 to 2001.
Of course we don’t need a bailout, we could just do as the feds do and run a deficient and just raise the debt ceiling every year. If of course we could get anyone to agree on that.