We’re now 25 billion dollars in the red in California. The governor along with his Democrat controlled legislature will never do the right thing. They’re the same folks who brought you this mess. When Governor Brown was previously the governor he signed the Dills Act in 1978 that gave civil servants the right to collective bargaining. He did this on his very first day in office as governor. This revolutionary enactment was the beginning of the end or our state. Now, with the power of government labor unions unchecked, state employees, now the largest unionized force of any state, have controlled the legislative agenda for the past 30 years. Their sweetheart pension plans are a marvel to their political strength and are unmatched anywhere in the private sector. This is why although state workers’ pensions are the single largest problem in this budget crisis, Brown has not even mentioned it in his new “reform” proposals. He has however mentioned tax increases, or as he calls them tax “extensions”. A two-thirds margin of Californians overwhelmingly opposes tax increases as a solution.
Here’s the problem, notwithstanding a current state budget deficit of 25 billion dollars, the state has 700 billion dollars in unfunded pension liabilities. This is ticking time bomb. No matter how much we cut and balance today’s budget, we will never catch up and meet the needs of the ridiculously high unfunded pensions. This is the problem. Brown’s budget may take away state workers’ cell phones and some social services dollars, but seriously, big deal. This is just more smoke and mirrors. It just kicks the can down the road. This will not solve our major structural problem.
Legalizing online poker, taxing marijuana (both proposed) and taxing air (already passed through cap and trade) will not solve the budget problems. The latter is a way of taxing the few manufacturing industries still dumb enough to be creating jobs in California. If they hadn’t got the memo earlier, this bill should be a neon sign. Get out of Dodge. We don’t see many folks clamoring for yet cleaner air, but we see millions looking for work.
Our legislature has been hallucinating for decades. They didn’t see the current budget crisis coming?
Perhaps, they’ve all been smoking that decriminalized marijuana. How else can you explain what the legislature has been doing? In the last 2 years, you would think that the legislature would be laser focused on the brewing crisis. Instead, it was busy, even consumed, passing 1,450 new crucial laws like that which banned shortening of cow’s tails and increased penalties for betting in office pools. Way to go, legislature!
The other major part of the budget is also largely untouched, K-12 education. Education represents 54% of the state budget. Brown still owes much to the teachers’ union which catapulted him into office this past November. It’s now payback time for Brown.
Without the political will to attack both the structural problems of K-12 funding and union pensions, there can be no solution to our structural budget crisis. Governor Brown knows this. The alternative is bankruptcy. Federal law prohibits states to file for bankruptcy, but they do allow for a federal receivership to be established and a receiver to take over. This is a distinction without a difference. This would allow us to cancel the pension agreements and refashion them to make sense considering our current economic malaise.
