Kudos to the voters of California who turned out yesterday and overwhelmingly rejected all 5 ballot initiatives that would have further leveraged the state’s fiscal future. In fact the only ballot initiative that passed (by a huge margin I might add) was Proposition 1F which makes it illegal for legislators to give themselves a pay raise when the state is struggling financially – now there’s some Common Sense!
So, what does this mean for California going forward? Put simply, it means they are in the kind of economic turmoil that this blog has been warning about for months. The kind of turmoil that was at the root of the Tea Parties back in April (despite the media’s idiotic attempt to tell you otherwise). The really bad kind of turmoil. Just read some of the highlights from this story by CBS’s Los Angeles affiliate (my emphasis added).
California’s chief banker said the state has been scraping by on loans and deferring payments for a decade.
The recession has revealed the depth of the structural imbalance between the revenue the state takes in and its spending obligations. Voters themselves are partly to blame, approving initiatives in years past that have created or expanded programs without identifying how to pay for them.
“One thing we do know is the voters’ wish list is a lot longer than the ‘I’m willing to pay for it’ list. People are going to have to rectify the two,” state Treasurer Bill Lockyer said.
As Carol Platt Liebau so effectively points out in her recent article, we can learn a lot from California. The state has legislated itself into a corner from which there may be no recovery topped by a $42 billion budget shortfall in fiscal year 2010 (yes, that’s billion with a “B”). How did they get there? Some of the highest tax rates and most stringent business regulations in the country, extremely tough environmental standards that make it nearly impossible for business to operate profitably, rampant illegal immigration and a legislature who believed it was appropriate to spend the money of law abiding tax payers supporting those illegals, a teacher’s union that has become so powerful it practically runs the school system, and on and on.
Does any of this sound at all familiar? Here are a few hints straight from the Democratic Congress and President’s current agendas: Tax increases for the “wealthy”, Cap & Trade, immigration reform, the Employee Free Choice Act. California’s current crisis was brought on by an extremely progressive agenda; an agenda the Democrats in Washington now want to push on the entire country. Apparently they believe if it doesn’t work, just expand the program and the results will magically improve!