Controller John Chiang says California will run out of cash in March without an increase in borrowing and a delay in some payments. This must be music to Jerry Brown’s ears because he can say that his $7 billion tax increase targeted for the November ballot is essential to keep the state in the black.
The governor’s approach to getting what he wants is to frighten the public with predictions of the “end of days” if he is unable to get his hands on a massive infusion of taxpayer cash. His message to taxpayers: Pay up or schools and popular services will be slashed.
While Chiang has legitimate concerns the shortage is the direct result of actions by the usual suspects. The governor and the Legislature “cooked the books” when approving last year’s budget. Because they wanted to spend more than would be realistically available in the 2011-12 fiscal year they included an additional $4 billion in fantasy income to balance the budget.
If there is a shortage this year it is not due to unforeseeable circumstances but rather to a conscious decision by the Sacramento politicians to overspend. They must have hoped that no one will have noticed or remembered their malfeasance by the time the bills come due. Perhaps they thought they could escape blame by paraphrasing Claude Rains in Casablanca: “I’m shocked shocked to find the books don’t balance!” as they enjoy the political benefits from money already spent.
While nearly every major California newspaper reported the Controller’s warning few published a closely related story. New Census Bureau statistics confirm that government employees in California continue to be the highest paid in in all 50 states. The monthly average of $5774 is $1152 more than the national average which comes to nearly $14000 extra each year. Add to this another report showing California government payroll grew by $500 million last year and one begins to understand why Sacramento is so desperate for more money.
The driving force behind the governor’s tax plan is payroll. The government employee unions whose support put him in charge in Sacramento are calling his debt and he is obliged to find ways to continue the high pay as well as the extraordinary benefits that were not part of the Census Bureau’s calculation.
Last year Arnold Schwarzenegger’s temporary tax increases ended over the militant objections of the current governor and the tax-and-spend lobby in the Legislature. Without the additional tax burden indications are the state is beginning a fragile economic recovery. Still the big spenders seem unclear on the concept that an improving economy not a tax hike is the best way to provide additional government revenue. However if they persist in pursuing tax increases they are about to learn that average taxpayers will not be receptive to paying more so that government employees can count on high pay lavish benefits and job security that most in the private sector can only dream of.
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.