Stop deficit spending
Sure, each year California “balances” its budget—it has to, because it’s the law. But it’s an utter sham. How do we regularly face a multibillion-dollar deficit in the spring…but magically solve the problem by summer?
I’ll tell you how: With accounting tricks and gimmicks that would land you in jail if you tried them at your company.
They do it by moving numbers into different columns, and by counting items that were already part of the budget as “new” savings on income and expenses. It’s pie-in-the-sky projections about state income and expenses—accounting tricks.
California is now projecting a $13 billion deficit—when the legislature supposedly “balanced” the budget in July using those gimmicks!
This is a chronic problem in Sacramento:
- In January 2008, the state projected a $14.5 billion deficit. By May, despite cuts of $7 billion, the projection had grown to $17.2 billion.
- In March 2009, the new deficit was $8 billion. By July, it had ballooned to $26.3 billion. That same month, the state began issuing IOUs.
- In January 2010, the deficit was projected at $20.7 billion. By November, even this massive number had grown to $25.4 billion.
- In 2011, the projected deficit has grown from about $8 billion, up to $25 billion … until the problem was “solved” in July.
But now it’s run up to $13 billion and climbing.
So it was never really solved.
Clearly, what the legislature is doing isn’t working. California needs deep changes to how it spends your money, because failing to deal with the problem ensures that it will only grow worse in the years ahead and possibly even bankrupt the state.
Worse yet, this constant chaos...these massive deficits...and chronic uncertainty about taxes and spending…are valid worries for business owners and entrepreneurs. And many of them choose to relocate, expand or open new businesses outside of California.
We can turn this around by implementing an immediate spending freeze, and then making significant cuts in the ingrained spending itself. Cutting year-to-year, with “balancing” in July that falls out of whack in August is not working. Spending cuts must come to the actual entrenched programs themselves.
To save our state, we must elect fiscal hawks to the Assembly and Senate.