Monday, May 14, 2012

Surprise! It’s Worse Than Predicted!

California Gov. Jerry “Moonbeam” Brown has just announced that his earlier prediction of a $12 billion budget deficit was slightly low. By about $4 billion. After vetoing the proposed budget that his own Democratic legislature considered tough but reasonable, the status quo of deepening debt continues. Brown had said that the proposed budget didn’t include sufficient tax increases to “balance” some minimal spending cuts.

As recently as January of this year, the state’s budget deficit was “only” $9.2 billion. It is now projected at $16 billion. The legislature had passed a budget that in theory at least would have “held the deficit line” with spending cuts and jury-rigging upward of certain state “fees.” Brown announced that he was vetoing the bill because it ignored the “hard choice” of raising income, sales and business taxes. At the time he signed the veto, he predicted that the deficit would remain about the same as he was preparing a ballot initiative which the voters could approve in June or November using his own calculations for raising taxes and cutting spending.

Brown has always been able to put his blinders on, do a few Buddhist chants, and convince himself that the real world doesn’t exist. Among the things he ignored were the cuts he did approve in state employee layoffs, reduced work hours for state employees (particularly the state prison system), cuts to state employee retirement benefits and required contribution to the pension funds for newer state employees. California has more lawyers than entrepeneurs, and Brown somehow didn’t foresee the intrusion into his plan via lawsuits, injunctions and federal interference which effectively blocked most of his cuts.

In an address during which he proclaimed that he was shocked--shocked-- to discover that the deficit had become even worse than he had imagined, Brown pandered to the public. Blaming the legislature for the additional shortfalls, he appealed to his liberal/populist base to “do what I can’t do and the legislature didn’t do.” He was talking about the not-yet completed budget proposal he will attempt to put on the state ballot for the voters to decide on.

A favorite liberal mantra came out during the speech. Do it for the children. “This [the additional deficit] means we will have to go much farther and make cuts far greater than I asked for at the beginning of the year. But we can’t fill this hole with cuts alone (most of which have not been implemented) without doing severe damage to our schools. That’s why I’m bypassing the gridlock and asking you, the people of California, to approve a plan that avoids cuts to schools and public safety.”

Brown also blamed “a crippling decade shaped by the collapse of the housing market and recession.” He neglects to mention that his fellow Democrats were instrumental in creating the economic mess he is now ostensibly attempting to fix. Businesses, the backbone of tax revenue, are fleeing California faster than bugs running from Raid. The worst thing a government can do in the midst of a recession and a lousy business climate is raise taxes, particularly taxes which make it more difficult for small and medium-size businesses to survive.

Brown proposes across-the-board tax increases as well as the ever-popular “millionaire’s” surtax. Like Barack Obama and the other Democrats, Brown simply doesn’t comprehend that those “millionaires” are largely business people whose income includes the income from the businesses that the taxes are crippling. Never having owned or run a business of his own, Brown is like most theorists who think “income” is the same concept as “salary.”

Most of the cuts he has proposed seem big (it’s a BIG budget), but they treat very gingerly the major source of the original and ongoing deficits—public employee benefits. That would be the public employees who are also union members, the unions being Brown’s single largest campaign contributors. The unions showed their gratitude during the first round of cuts by suing Brown and the state to retain all their bankrupting benefits and wage guarantees.

Now it’s important to be aware that Brown says that all the tax increases would be temporary. Temporary like the federal telephone excise tax that first went into effect during the Spanish-American War. Brown says that his temporary tax increases, if approved by the voters, would raise an additional $9 billion. Well, we already know how good his estimates are. The nonpartisan State Analyst’s Office says it would be more like $6.8 billion, and assumes that the economy will get no worse and not another single major employer will leave the state. Unless Brown is planning on deploying the California National Guard to the state borders, the business exodus will continue on an accelerating basis and net tax revenue will continue to decrease.

To punctuate his veiled threat if the voters don’t approve his ballot proposal, Brown says “I have a contingency plan which would automatically result in shortened kindergarten through twelfth-grade school schedules, as well as higher college tuitions at the state institutions.” I can’t help thinking that getting the kids out of the failed public schools and into the real world might actually be a true learning experience.

As a semi-related note, I can’t help mentioning that Brown is in some ways more successful than Barack Obama. Remember my articles about Goodwin Liu, the leftist UC Berkeley law professor whom the US Senate twice rejected for a seat on the Ninth Circuit Court of Appeals? Well, don’t cry for Liu, Argentina. Brown nominated Liu for a seat on the California Supreme Court, and he was unanimously confirmed this past September. Now, both the US Constitution and the California State Constitution are in danger.

32 comments:

Joel Farnham said...

I feel so sad about California. I was born there and lived most of my life in the Sacramento Valley. I am glad I got out, but it is sad.

LawHawk,

When do you think cheyne-stokes respiration is going to kick in?

K said...

I'm proud that 6 weeks of my labor goes to provide several undocumented Mexican nationals with California state services.

De nada amigos!

BevfromNYC said...

I think we can solve their debt crisis by selling California to China! Maybe not so much selling as breaking it off at the fault line and floating over to China in partial payment of our loans.

StanH said...

Congratulations Lawhawk, California is number one. When I read this, this weekend I thought of you, and how opportune your move from SF is now. When gravity takes over, and the spigot is cut off, the wilding in major CA cities will be terrible indeed. Better to be in the country, and armed to the teeth. Also Sacramento, has got to be the most dysfunctional statehouse in America, followed by Illinois, a close second.

tryanmax said...

The "hard choice" of raising taxes??? It never seems too hard for Democrats. Here's a clue for Moonbeam: when all your buddies are patting you on the back, you aren't making hard choices!

T-Rav said...

"Hard choice" is rapidly becoming my most-hated phrase in politispeak. How is it that these "hard choices" Brown, Obama et al. constantly speak of have to be made by people other than themselves, i.e. taxpayers?

Writer X said...

It's like watching people jump blindly off a cliff, with Brown at the helm.

Jocelyn said...

I like how Brown thinks that by taking his plea to the public, we will vote to increase taxes on ourself. I don't remember what the statistic is, but I'm pretty sure the last few times Brown tried putting those on the ballot, we voted "no". I have also been kind of surprised that California hasn't been in the news more so lately, unless I'm missing something, other than 0bama clogging up traffic.

Libertarian Advocate said...

Maybe not so much selling as breaking it off at the fault line and floating over to China in partial payment of our loans.

Hmmmm... anyone know some good land brokers 4 miles east of San Bernardino?

Patti said...

This entry made me feel like I was mucking around in filth. These libs have no shame (as my mother likes to say). To invoke "the children" is tired and manipulative. California is reaping what they sowed. God help them.

AndrewPrice said...

Yeah, what a surprise. Frankly, it couldn't happen to a more deserving state. Maybe this will teach them error of liberalism. No, I doubt it.

LawHawkRFD said...

Joel: I can't say for sure, I only know that I've been gasping for air for about two decades now. LOL

LawHawkRFD said...

K: Yes, that's called CBOM (charity by other means). You are very generous. Si, se puede.

LawHawkRFD said...

Bev: I don't think even China is willing to take on this gigantic turkey. But if they did, they would at least be reminded how well socialism works.

LawHawkRFD said...

Stan: Gee, thanks for reminding me that I was born in Illinois and have spent most of my life in California. A double-whammy. My kids have suggested that maybe I'm a jinx. I refuse to take the blame--I'm not that good.

StanH said...

I stand corrected LA…ha. Hartford does take blithering to new heights, however I believe Springfield edges you out.

LawHawkRFD said...

tryanmax: The only thing hard about Democrats raising taxes is figuring out how to keep their biggest contributors exempt.

LawHawkRFD said...

T-Rav: "Making the hard choices" has replaced "speaking truth to power" as the idiotic slogan of Democrats who easily raise taxes and couldn't even speak truth to power when they were the power. The liberals have been lying to themselves for so long they can't separate reality from fantasy.

LawHawkRFD said...

WriterX: But Brown will have the last laugh. He's attached to a bungee cord.

Joel Farnham said...

LawHawk,

I didn't mean for you, I meant for California! LOL

LawHawkRFD said...

Jocelyn: It's a win-win for him. Brown isn't the first California politician to use the initiative/referendum process to deflect blame away from himself. If the ballot measure passes (which I seriously doubt), he's a statesman. If it doesn't pass and the Democrats still refuse to make big cuts in state spending without raising taxes through the roof, he can say "I tried, but you just didn't listen to me." He gets to be a hero or a martyr, and either one is fine with Moonbeam.

LawHawkRFD said...

Libertarian Advocate: And China will immediately open up the water spigots that the envirowackos have screwed shut, the Central Valley will bloom, the Delta smelt will die its well-deserved death, and California will become the most profitable province of China. All because Beijing understands capitalism better than Sacramento.

LawHawkRFD said...

Patti: California could reverse all its problems practically overnight. But it won't because the inmates have taken over the asylum.

LawHawkRFD said...

Andrew: You misunderstand. The only thing wrong with liberalism is that it still isn't powerful enough to get conservatives to stop interfering with their plans.

LawHawkRFD said...

Joel: Not to worry. I didn't take it personally.

LawHawkRFD said...

T-Rav: The contrasts between downstate Illinois and Cook County (Chicago) are even greater than the California Coast/urban centers vs. the Inland Empire. When I was growing up in an L.A. suburb, the people next door (literally) were also from Illinois. We came from Chicago, they came from way downstate Marion (where there is now a maximum/medium security prison). You wouldn't have known we were from the same planet, let alone the same state. My dad sort of acted as the mediator/translator since he spent his adult life in Chicago, but grew up on a farm in Barrington. They used jargon with expressions which might as well have been Klingon, and I genuinely had a hard time understanding what they were saying (although I learned as the years went on). That is not entirely a criticism. They were among the hardest-working, most family-oriented, and generous people I've ever known.

T-Rav said...

LawHawk, I've been through or near Marion once or twice, and that general area more often. It's a very productive, old mining area, although I fear that, like so many, much of its population has been ruined by welfare. Thanks for nothing, Chicago.

LawHawkRFD said...

T-Rav: I've heard that Marion is now a bit of a retail center, which it certainly wasn't back in the 50s and 60s. But things change, and my grandfather's farm is now a suburban subdivision. Much of southern Illinois sits near the border areas where welfare has been a persistent problem since the Roosevelt era.

California's problems are big, but I suppose they could be worse. Our crooks look like choirboys compared to the professional crooks who run Chicago (and essentially the entire state). But for the average guy, it doesn't really matter whether it is intentional or negligent politics that has caused the state to fail.

TJ said...

"And China will immediately open up the water spigots that the envirowackos have screwed shut, the Central Valley will bloom, the Delta smelt will die its well-deserved death, and California will become the most profitable province of China. All because Beijing understands capitalism better than Sacramento."

What a twisted commentary on California - Lawhawk, you have my sympathy.

LawHawkRFD said...

TJ: Irony is totally lost on Lotus-Land Liberals. The Red Chinese may not much like the theory of capitalism, but they at least have the intelligence to see its benefits. Liberals don't even have that much understanding.

Tennessee Jed said...

California is reaping what it has sewn. Moon beam and bankruptcy. Can't Spielberg and Clooney just write a few checks to bail them out or did they promise it all to B.O.?

LawHawkRFD said...

Tennessee: There you go again, blaming people for their own screwups. LOL

Brown is the old left's favorite celebrity, and has the support of the Hollywood unions, fading rock stars and has-been actors. Linda Ronstadt was his beard for years back in the 70s and 80s. When was the last time you listened to a major new hit from Linda Ronstadt?

Obama is young, fresh and fits all the necessary stereotypes for the younger Hollywood crowd. Brown could have a fundraiser at Clooney's place and nobody would come (unless they wanted Clooney's autograph). The One grins his toothy grin, then feigns seriousness while announcing he is for gay marriage and at Clooney's house raises $15 million. Budgets are boring, but sexual adventure draws big crowds among the Hollywood elite. Brown gets the unions, Obama gets the stars.

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