Wednesday, November 25, 2009

The California Budget

In California the current budget is $6.3 billion out of balance and the 2010-11 budget has another $14.4 billion hole. If some of the bleaker economic forecasts kicking around are accurate and/or the state doesn't act quickly to close the gap, the $20.7 billion problem could easily balloon to $25 billion or more. As temporary tax increases expire and deferred spending promises come due, the state faces annual deficits in the $20 billion range for many years to come. What to do? Raise taxes, cut spending or create more budget gimmicks? The California Teachers Association-led Education Coalition fired a salvo of complaints about past cuts on schools, and the powerful Service Employees International Union declared, "Budget solutions must include new revenue." February's temporary tax increases have already stirred a backlash, and hitting taxpayers again in the midst of this record-deep recession would be politically almost impossible. They've scraped the bottom of the gimmick barrel, voters are livid and new taxes are functionally off the table. This will be one of the bloodiest skirmishes the Capitol has ever seen – with the only option being that the most populous state in the nation default on its debts.

Read it all here and remember this when you see unions asking for more power.

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