Welcome to the Real World

In the real California taxpayers and homeowners are struggling to survive. Unemployment is 12.6% and those lucky enough to have jobs are having their hours and benefits cut. Credible threats of foreclosure hang over the heads of millions of homeowners and even a slight bump in their personal financial situations could result in them living on the streets.

In the real California small businesses are faring just as poorly. Thousands of shuttered shops fill strip malls and main streets throughout the state. While some indicators suggest that the residential real estate market has bottomed out the same cannot be said for commercial property. A tidal wave of foreclosures looms on the horizon.

But in fantasy California nothing is wrong. Employment is secure budgets are at or close to historic highs and an air of entitlement continues to be the norm. New programs continue to be enacted without concern about future costs. Sure in fantasy land some have had to take one day a week off but that has allowed and extra day of skiing at Lake Tahoe. And of course health care benefits and pensions continue to be the highest in the nation. All is glorious in fantasy California — also known as government.

Well after decades of warnings from those in the private sector those in fantasy land are about to get a rude awakening. Governor Schwarzenegger’s new budget revision also known as the “May revise” is chock full of harsh realities. Starting with a $19 billion budget shortfall (larger than the entire budgets of several states) and ending with wholesale termination of social welfare programs including CalWorks it is readily apparent that those in charge of state government are quickly running out of gimmicks to paper over the problem.

Another harsh reality for the tax-and-spend lobby is that unlike last year when a budget deal forced a massive new tax increase on Californians that option is not available this year. Part of that deal was to put an extension of the $12 billion tax increase to the voters to see if they would accept another $16 billion in higher taxes in exchange for a weak spending limitation measure. Despite being backed by the collective political elite from both parties voters rejected the tax increase last May by a 2-1 margin.

What all this means is that for the first time those who want bigger government and more perks for public employees are faced with the harsh reality that we have limited resources and that — gasp — we are actually going to have to prioritize spending. In other words those in government and those employed by government are going to get a taste of what it is like in the real world. Perhaps not completely as the generous pension benefits they receive are entitled to some measure of protection and most government programs will continue to receive sufficient funding to remain operational. But the rest of society is fed up with the entitlement mentality of those in government and will demand more efficient use of our tax dollars.

How this plays out will be interesting. For the tax and spend lobby there will be a huge competition between public employee unions and those advocating for preserving social programs for California’s most vulnerable. Given who provides the most amount of campaign contributions to the legislators in control it would be foolish to bet against the unions. But if nothing else this competition for tax dollars will help expose the true nature of public employee unions as just another special interest not an altruistic force for social justice.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.