It is early October, about 100 days after the required deadline,and there is still no budget for the State of California. This past weekend word leaked out there is a proposed spending plan.
The plan is for more of the same. As outlined in the OC Register,Investors Business Daily, Bloomberg and other places, the plan calls for tax increases, wishful thinking, borrowing, unicorn farts and pixie dust.
Neither the Governor nor the Legislature wants to do the hard work of cutting spending to fit the current tax structure. Instead, the proposal assumes the Federal government will give California a large grant, and that sales tax revenue will increase. If the US House of Representatives switches to majority control in November, it seems unlikely California will get a multi-billion dollar grant. But perhaps such a grant will be jammed through during a lame duck session. The House will not be sending grant money before the election because the House is no longer in session. Where will the increased sales tax revenue come from? Nobody knows. Look in the same place one finds pixie dust.
The tax increases are in the form of delayed tax reductions. The reductions were negotiated as part of the last budget go-around. A delay in reduction is the same as an increase because business and personal plans were made based on future costs. The future costs have changed.
A realistic budget was not proposed during the January Fiscal Emergency, or before the deadline set forth in the California Constitution, or before the Assembly session ended. So why should anybody expect a budget now? The State is fiscally bankrupt, so the only currency is political in nature. As part of the “budget deal”, what is being done to screw the taxpayers? We cannot yet tell.
The best result would be no spending plan. The current proposal, from what is known, is more of the same crap that got us into the financial hole we are in now. The people now in Sacramento are the source of the problem and have shown themselves to be incapable of creating a solution.
Perhaps the next Governor and the next Legislature will be better, but do not count on it.