This story was reported for the San Diego News Network on February 25, 2010.
With one set of budget cuts reaching Gov. Arnold Schwarzenegger’s desk and the ongoing debate over the state’s tax system, not much is happening in Sacramento.
Such static has a lot of anxious Californians chiming in, though.
This California Budget Crisis Diaries entry will be focus on opinions throughout the Golden State because… well, not much is happening. In fact, California Treasurer Bill Lockyer told the Assembly Budget Committee, “his staff has postponed a planned sale of $2.5 billion in general obligation bonds, due to inaction by legislators on a bill to help guide the flow of cash during some lean months this spring,” according to John Myers from KQED Capitol Notes.
Here’s your editorial roundup, and be sure to offer your thoughts via our comments section.
“Wishful thinking”: The Riverside Press-Enterprise is calling Schwarzenegger’s and legislators’ plan of closing the budget deficit “wishful thinking.” Its editorial team revolves its opinion around Schwarzenegger’s expectation to receive $7 billion from the federal government while legislators rely too much on revenue increases.
“Wishful thinking has never been a fruitful strategy for closing the state’s persistent budget gaps. The governor and Legislature prefer to believe in the improbable rather than exercise fiscal discipline. But there is no substitute for state budgets that honestly balance spending with revenue.”
The editorial team digs in deeper with its thoughts.
“The notion that the federal government will give $7 billion to the state is unrealistic, the state’s legislative analyst says. And counting on a surge in state tax money is a foolish bet. Revenue growth is hardly guaranteed this year, and in any case will not be enough to close the $19.9 billion hole in the state budget through mid-2011. Postponing budget-balancing choices only makes the eventual steps more painful, while ensuring that the state’s fiscal turmoil continues.”
They also write that legislators have ignored warnings made by State Controller John Chiang who noted that the state is “on track to run out of cash by summer.”
Recovery plan: Bill Allen, president and CEO of the Los Angeles County Economic Development Corp., is offering a simple recovery plan for California. Allen writes in Fox & Hounds, that the plan grew from “more than two dozen public forums” with stakeholders.
“The plan, which grew from this very public process, reflects the distinct needs of the county’s economy, a $500 billion economy that is larger than the economies of either Taiwan or Hong Kong. The plan identifies five core aspirational goals necessary for economic growth and creation of more and better jobs. They are: an educated work force, a business-friendly environment, an attractive quality of life, smart land use and 21st century infrastructure. Underlying these goals is a series of 12 objectives and 52 strategies to strengthen the economy, improve the environment and invigorate communities.”
Their plan is mainly focused on “regional cooperation” and asks that the state government allow other people to offer their thoughts on how to fix the $20 billion budget hole and overall, structure of the government.
Allen includes that the risks are “great.”
“The risks to California of failing to adopt a proactive strategic plan for economic development are great. We all appreciate and value the sheer size, tremendous diversity and global significance of the California economy, but our state has fallen short of its full economic capacity and potential. Over the last quarter-century, California has noticeably underperformed in terms of job creation for its 36.8 million residents. From 1980-2008, the state added approximately 14.7 million residents, but only created about 4.3 million jobs for those residents. California lost an additional 670,000 jobs in 2009. And Chief Executive magazine has ranked California last among the states in terms of places to do business for the past four years.”
Health care reform could help: While President Barack Obama and congressional leaders partake in a health care summit Thursday, one California editorial team writes that to “rally” behind the
Democratic plan could help California’s budgetary problems. In fact, the San Jose Mercury News team writes that Obama and Schwarzenegger share the same ideals.
“The plan the president announced Monday actually mirrors the reforms Schwarzenegger fought for and nearly achieved in California three years ago. So it’s not surprising that the governor, while acknowledging some flaws, is generally a supporter. Finding a steady, viable funding stream for every resident’s health care is a key to California’s own budget solutions — and right now, Obama’s plan offers the only real shot at ending the nation’s health care crisis.”
The column states that nearly 10 million Californians are uninsured or “one of every three people in the state.”
“Obama’s blueprint would reduce premium costs for small business owners who now can’t afford to cover employees or hesitate to hire more because of benefit costs. It would provide coverage to about 75 percent of California’s uninsured and reduce the ranks of the uninsured nationally from 45 million to 15 million. It would reduce premium costs for millions of families and begin to rein in soaring medical costs.”
In fact, Schwarzenegger said this week that anyone asking federal officials to “start from scratch” is doing “bogus talk.”
In other budget news, check out what’s happening with the decrease of students to community colleges and how Lehman Brothers is “haunting” California.
Hoa Quach is the political editor for the San Diego News Network.