Thursday, September 04, 2008


California Budget Crisis

It's a crisis, all right. Health care organizations that depend on the State for funding are in danger of going bankrupt and having to cease operations. For those of us who, like me, are retired, on Medicare, have supplemental health insurance provided by my former employer, and enjoy a fairly good income, the budget crisis doesn't affect us at all. I suspect it doesn't affect the legislators, either, except that they are not getting paid for the duration of the stand-off.

California has a requirement that a 2/3 majority vote is required in each house of the legislature to pass a budget or to create or raise a tax. The minority party in the legislature has vowed not to vote for any tax increase. The proposed budget submitted by the Governor required an increase in taxes to make up for years of eking out the available revenue with borrowed money. This year the gap between revenue and expenses is too great for any more borrowing or accounting tricks.

Today the minority party (Republican) in the legislature has announced that it will submit its own budget next week. It will be interesting to see which services they plan to cut or eliminate. Actually, the Republicans are doing a good service to the citizens of California. Californians generally don't pay attention to the problems of governing the State. They keep voting into law various proposals that seem good at the time. At one time it seemed that property taxes were increasing at such a rate (proportional to the run-up in property values) that many people of modest means were in danger of losing their homes. Accordingly, the People of California joined the Tax Revolt of Howard Jarvis and enacted the property tax limit (Proposition 13). The same proposition made it almost impossible for local governments to increase any taxes and almost impossible for the State legislature to increase taxes. In each case, a 2/3 vote was required. In the case of local governments, the 2/3 applied to the voters at an election. In the case of the State, the 2/3 applied to the legislature. At the same time, a 2/3 vote was mandated for enacting the State Budget.

Since that time, it has been nearly impossible for the legislature to agree on a budget on time. The State's fiscal year starts on July 1 and the budget should be in place by June 30. Each year the process has dragged out while the minority (1/3 + 1) holds out for some special goodies or for some draconian limits on future State spending. This requirement is one of several that the good people of this State have enacted that make it almost impossible to govern the State. This year, at last, some of the political leaders are proposing an initiative constitutional amendment that would do away with the 2/3 vote requirement in the legislature. If such a proposal gets to the ballot, it will have to be by way of gathering signatures. The legislature can not put a constitutional amendment on the ballot except by a 2/3 vote.

The People of California are getting what they deserve for enacting such a crippling provision. The Republican hold-outs in the legislature are doing the people a service by illustrating the result of such crippling.


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