As many have stated. We don’t have a revenue problem, we have a spending problem

Today’s OC Register editorial entitled “State fiscal future not rosy” is not a new story. Just like Supervisor Moorlach kept blowing a horn warning us that we were heading to a train wreck prior to the county bankruptcy, Senator Tom McClintock has repeatedly expressed similar conservative assessments of our state budget. Sadly many simply keep their heads in the sand saying it won’t happen to us.

In the editorial the Register shares the opinion of Dem State Treasurer Bill Lockyer “that 20 years from now the state budget deficit will grow to $14.6 billion unless Californians make some hard decisions.”
What caught my eye was that our “current $107 billion operating budget will grow to $252 billion in the next two decades–without new programs or additional taxes.”
This is a runaway freight train with a Democratic majority looking to expand our current entitlement programs such as health care for six million uninsured residents. How do we eradicate this red ink? Raise taxes, cut programs, or both.

The Public Policy Institute, PPIC, has just released its Sept 2007 survey entitled “Californians and Their Government.” In gathering data for this 42 page report they contacted 1003 adult residents on state and national issues. This is their 25th annual survey on this topic. Under the first topic heading they included “perceptions of the most important issues facing California today; opinions about the general direction of the state and the outlook for the state’s economy” etc.
You can download a free copy of their report at:
http://www.ppic.org/main/publication.asp?i=772

Found on page 8, under the heading of Overall Mood, it states “Californians name immigration (18%) as the most important issue facing the state today, followed by health care (14%) and the economy (13%). Fewer than one in 10 mention education (7%), housing (7%), or other issues.”
PPIC reports that “Californians are pessimistic about the state’s economy in the coming year.” The report goes on to say that “Pessimism about the state’s economic outlook among adults has increased by 10 points since June (49%) and 20 points since January (39%).”

In my opinion many residents, other than an obligation to pay off a home mortgage or making car payments, view financial issues in a short timeframe. While PPIC did ask about the economy looking out 12 months they apparently did not look over the horizon. This is the area that some take a position that tomorrow will take of itself.

What will tomorrow look like? We read that our population will grow to 60 million in the next two decades. Will we be able to provide good paying jobs for them or will potential increased taxes and regulations keep the private sector from expanding current facilities or stop other firms from moving to California? Is there a business plan to balance the budget in 2020 or whatever year you wish to critique?

On the bottom of page 8 is a graph which answers the following question. “Turning to economic conditions in California, do you think that during the next 12 months we will have good times financially or bad times?” The response was that 33% said good times, 59% said bad times with 8% responding that they “don’t know.”

Is our attitude to let future Californians resolve this financial shortfall by imposing higher taxes on themselves or cut government programs?

Let me digress. As our next semi annual conference on Property Rights/Eminent Domain Protection is being held on Saturday Oct 13th in San Jose let me share the following. When I became a member of Californians United for Redevelopment Education, CURE, the partner of Municipal Officials for Redevelopment Reform, MORR, we reported statewide redevelopment debt at $37 billion dollars. That was in 1995. Next week our latest book, Redevelopment the Unknown Government, will report current debt exceeding $81 billion dollars.

While some understand these future financial obligations, many in California focus on the next 12 months instead of the next 12 years. I point this out in that we have two financial disasters running in parallel in our state, that unless we start to apply the brakes today will be a huge burden on our children and grandchildren for decades to come.

PS: As you ponder this report, or draft any comments you wish to provide, don’t ignore our massive local, county and statewide pension obligations.

The dot.com days are all in the past. We have already spent that tax “windfall” in Sacramento. Can anyone reading the Register Editorial or this report tell the rest of us that we can sleep well tonight knowing that we should be ignored as the “sky is falling” alarmist?

Help us out here. What suggestions are you willing to share to alleviate our fears?


About Larry Gilbert