Schwarzenegger's "Kick-The-Can" Budgeting
The state of California is not generating the revenue that they expected. This is clear and it's been known for some time. The original budget that the Governor proposed, based on those sunny estimates, is obsolete. In order to balance the budget, spending will have to decrease or revenue increased. We know what choice the Republican will make.
Gov. Arnold Schwarzenegger is likely to call for state spending cuts beyond those he proposed in January when he presents a revised budget to the Legislature next week, administration officials said Tuesday [...]
In January, Schwarzenegger outlined a $103 billion general-fund budget for the 2007-08 fiscal year and proposed balancing it by withholding cost-of-living increases for welfare recipients, cutting welfare payments to children whose parents fail to comply with work requirements, and reducing aid to the homeless, among other things.
The cuts to welfare will remain in the budget the Republican governor is slated to unveil on Monday, Palmer said. That could set up a showdown with Democratic lawmakers, who have made it clear they oppose reducing the social safety net for children.
But don't worry, there's a Plan B; privatizing the lottery!
Gov. Arnold Schwarzenegger is poised to call for privatizing the state lottery, a move that would bring California a cash infusion of as much as $37 billion to help solve pressing budget problems but also could sacrifice a major revenue source for decades to come.
....It comes at a time when the state is facing only a modest budget deficit for the coming fiscal year — about $1 billion. But billions more in bond payments will be due soon after.
This is "kick-the-can-down-the-road" budgeting, and it's no different than George Bush trying to run out the clock on Iraq so that the next executive has to clean up the mess. It's irresponsible to put so much of a debt burden on future generations. We're looking at hundreds of billions of dollars in debt for decades and decades, in bond issues and the loss of revenue for short-term gain. Kevin Drum thunders on this, and he's absolutely correct:
Once again, Arnold "We Have To Stop This Crazy Deficit Spending" Schwarzenegger is desperately trying to figure out a way to increase our deficit spending so that he can continue to pretend that he hasn't raised taxes. That's all this is about.
He's already done this once with his deficit bonds, which will have to be repaid out of increased taxes eventually, and now, in order to make sure that "eventually" is sometime after he leaves office, he wants to raid the lottery to tide himself over. The result, of course, will be lower revenue in the future and therefore higher taxes. But not on his watch.
Schwarzenegger may have a sunnier persona than George Bush, but the cynicism on offer here is even worse than Bush's. Arnold knows perfectly well he's raising taxes. He's just hoping the rest of us are greedy enough to allow ourselves to be convinced otherwise.
We're going to have three and a half more years of this nonsense, of this focus on short-term glitz at the expense of long-term security. We are getting played, and I would like to see some of our Democratic leaders in this state make this point forcefully.