Since the Wall Street Journal has been picking up some of our posts about the Bay Area’s own Nancy Pelosi lately I will return the favor and point you to this recent editorial concerning the May 19 California Ballot Measures 1A-thru Failing.
The WSJ’s “California Reckoning,” avers that California may be headed toward a critical referendum on liberal tax and spend governance tomorrow.
“By far the most consequential initiative is Proposition 1A, which is favored by most of the Sacramento political class.” But it’s fig leaf of a spending cap that is far weaker than the Gann Amendment that passed with 74% of the vote in 1979.
Despite its claims of good intentions, “Prop 1A allows spending to grow each year at the average rate of growth of tax receipts over the previous decade, or at the rate of population growth plus inflation, whichever is greater. Revenues above that amount are pushed into the reserve fund to be spent at a later date.”
But to get this “sort-of” cap, voters must also approve a two-year $16 billion extension of this year’s tax hikes. The 0.25% income-tax surcharge (to 10.55%) and the near doubling of the car tax would be extended through 2013, and the one percentage point sales tax hike (to 9%) would be extended through 2012.
“Even worse is Prop 1B, which would divert $9.3 billion from the rainy day fund to the education spenders in Sacramento and thus exempt half the general fund budget from any belt tightening. This would refortify the teachers unions, which have spent $2.7 million to pass the measure and are the very group most responsible for California’s fiscal mess. Teacher pay and benefits are already 35% above the national average.”
Then there are the gimmick Propositions 1C, 1D and 1E, which would raid trust funds and use any surpluses to pay current general fund bills. The preposterous 1C would raise $5 billion today by securitizing future lottery revenues. That would add more than $350 million of new debt payments annually for at least the next 20 years. What’s next, selling the silverware in the Governor’s mansion?”
We agree with the WSJ that, “California politicians have operated for years as if the purpose of government is not to provide reliable public services at low cost, but to feed public employee unions.” And that, “Sacramento needs to rethink its highly progressive anti-growth tax code, where the tax rates are the highest outside of New York City.”
Sadly, California’s massive current and structural debt crisis will not be solved whether Californians pass or defeat the ludicrous ballot measures. It is simply too little too late.
California—and the Mt Diablo Unified School District (MDUSD), as it serves the interests of politicians including Senators DeSaulnier and Torlakson, Sacramento bureaucrats, and teacher unions instead of parents and taxpayers—has been careening toward the barrier at the edge abyss of fiscal ruin for decades and now has crashed through and is in terminal-velocity free fall to its doom whether or not the Props pass. There just are not enough ambulances parked down at the bottom of Death Valley to even begin to clean up the carnage that will remain on Wednesday morning, May 20.
Let the triage begin.