Driving across the Golden Gate Bridge on a gorgeous afternoon, it's hard to imagine that California's economy - the world's tenth largest - is teetering on the brink of ruin. Nonetheless, California has a budget crisis that will drastically change the quality of life in the Golden State. Who's to blame?
Many observers fault Governor Arnold Schwarzenegger. Democrats and Republicans expected the "Governator" to bring legislators together on key issues, particularly the annual struggle to balance the state's budget. Sadly, the hulking movie star proved to be an untrustworthy negotiator, who often appeared to be looking out for his own interests rather than brokering a compromise beneficial to California. As a result of his ineffective leadership, the California budget crisis has deteriorated into a three-way battle, where neither Democratic nor Republican lawmakers respect Schwarzenegger.
On the other hand, many Californians blame the legislature. The latest California registration statistics show Democrats widening their lead over Republicans, 44.6 percent to 31.1 percent, with 20 percent "decline to state" and 4.4 percent scattered among other Parties. Republicans don't have a majority of registered voters in a single congressional or legislative district. As a result, Democrats have a commanding but not compelling majority in both the state Senate (25 to 15) and Assembly (51 to 29). In most states, this numerical superiority would permit Democrats to pass whatever legislation they desire, but California is one of only three states that require a 2/3rds vote to pass a state budget. Republicans have used this rule to block all attempts to pass budgets with tax increases. Typically they play a game of "chicken" with their Democratic colleagues and after days of a stalemate, Dems cave in and meet Republican demands.
Many political pundits believe California is ungovernable, noting that our coastline is 840 miles long and 37 million people are spread over the Golden State's 164,000 square miles. The coastal counties tend to be heavily Democratic, while those to the east favor Republicans. Voters in Berkeley view politics from a radically different perspective than do those in Palm Springs.
Nonetheless, while California's decline can be blamed on Governor Schwarzenegger, the legislature, and the size and complexity of the state, the primary responsibility falls on the voters.
Although Californians have historically been narcissistic, their self-centeredness didn't affect the state's finances until 1978 when Proposition 13 was passed. The "People's Initiative to Limit Property Taxation" capped property taxes at one percent of assessed value and mandated that increases would require a two-thirds majority at both the state and local level. The "taxpayer's revolt" signaled the beginning of "free beer" myopia, where residents of the Golden State believed they could continue to enjoy public services without paying for them.
The consequences of proposition 13 percolated throughout the state's economic and social systems. The California education system deteriorated to the point where it is now ranked 47th in the US. Pundits have characterized the consequences of proposition 13 as the "Mississippification" of California. For the past 30 years, governors and legislators have tried to keep California's financial house together by a series of tricks, most often borrowing in anticipation of future revenues. That worked as long as the California economy was strong, but the recession toppled the Golden State's house of cards.
Faced with a $28 billion budget deficit, California's Democratic legislators now have no choice but to dramatically reduce services. Given the necessity to have a two-thirds legislative majority to pass a budget, and raise taxes, Dems will be forced to make drastic cuts because it won't be possible to increase revenues. California's austerity budget will have draconian impacts on state services: school and park closings, suspension of road repairs, parole of thousands of inmates, cessation of medical and social support for the needy, and on and on.
While the budget crisis will eventually affect all Golden State residents, it will have the greatest impact on those who live in poorer communities. Residents of Beverly Hills will find money to repair their streets, pay their public-safety personnel, and retain reasonable class-sizes in their public schools. That's unlikely to happen in poor communities such as South Central Los Angeles. As a result, the differences between the rich and poor will be accentuated.
There's a way out of this mess, but it will take time. In 2010, Schwarzenegger will leave office and Californians will have an opportunity to elect someone who is actually a leader, as opposed to an actor who occasionally plays the part. In the same election there will be a ballot measure that changes the budget rules to allow passage with a simple majority. Those will be necessary but not sufficient conditions to halt California's descent into mediocrity.
Californians have to open our wallets and pay for schools, parks, roads, public safety, and all the other perks we've long associated with living in the Golden State. Our choice is to either to act like adults or resign ourselves to living in a third-world country. Albania here I come.
One nearly never mentioned solution literally removes the hoard of backward and selfish taxpayers clamoring for cuts, cuts, cuts and Republicans from the equation. This involves splitting the state into a socialist West California (consisting of the strip of coastal land from L.A. to Marin County, bounded on the East by the crest of the coastal range) and a free East California consisting of Orange County, San Diego County, San Bernadino County, Riverside County, the Central Valley, the entire eastern section of the state and the northern counties – basically the red sections of California. This division also results in nice, contiguous states.
This is a win-win by any measure. It allows socialists to tax and spend to their hearts delight while relegating the selfish to their own hell of financial freedom, although, … I’m sure that you would soon hear the plaintive cries of “Please, oh please, don’t throw me into the briar bush of East Californiaâ€.
The inhabited houses are still meticulously maintained, roses and fruit trees flourish, the neighbors are friendly, the children are laughing, the churches are full, and the roosters crow at dawn.
But creeping wreckage and ruin cast a shadow on the dreams of those who built these houses during the good times of the fifties, and who bought into the dream in recent decades.
People and corporations who bought their property after prop 13 passed are highly taxed, but those who bought before are paying nothing into this state and passing the tax burden on to their neighbors. The tax rate is INHERITABLE too. So Prop 13 created a new class of landed gentry in California. That's what you should be outraged by. We were the crown jewel of the country before that insane prop was passed and it was the Reagan crowd that got it passed. It gutted this state and took a whole bunch of people who had benefited from this state and took them right off the hook. They went to our world-class public schools and got a free education all the way through college, and then decided that they didn't want to pay taxes. Their corporate buddies were happy too, because they didn't have to pay taxes in a state that had brought them such amazing success.
Read Prop 13, it is insane.
I think that the Republicans are to blame. Every year the state legislature votes. Every year the Republican minority punishes everyone in the state by blocking tax increases necessary to balance the budget.
Republican politicians in the state are a kind of fifth column, sabotaging our state for their national political masters.
Voting these self serving Republicans out of office is the solution!
Regards,
"If Jarvis-Gann passes, local governments will lose $6-$7 billion in property tax revenue. If the State Legislature does not act to replace these revenues or revise current law governing health, education and welfare, then vital services - including police, fire, and education - will have to be drastically cut. The result would be chaos. Thus, we will be fully dependent on the State Legislature to prevent local services from being emasculated. Decisions once made by local governments, where voter influence is more direct, will now be made by a State Legislature which has been notably unresponsive."
http://eec.co.la.ca.us/publications/html/legislat/7804-StatementonProp13.asp
The problem is that once the "Tax Cuts" chant starts to rise myopia sets in and comprehension of cause and effect evaporates as the brain's pleasure center is stimulated by the message "I gets to keep me more money for me to buy toys? Yea!"
Californians were warned about the ramifications of the Jarvis-Gann Initiative 30 years ago, and in light of the fact that the majority of those who benefited from Prop 13 are now dead or dying off, the remaining Californians are left to enjoy the benevolence of the dearly departed's selfishness.
So, the problem is the same---essentially, the demand by American citizens to have something for nothing. Though we all cry out that government is wasteful, we want the services that the state or federal government offer, but we want them for free. Please, no to taxes---yes, to the various and sundry services (in reality, most are vital--but, some are not) that offer lots of employment in the industrialized world we live in.
Californians should be ashamed of their government as all Americans should be ashamed of Washington. And, Californians should be ashamed of the way they vote on the ballot initiatives--there, again, voting directly in ways that results in something for nothing (or nothing for something). The American "dream world".
For California government to work again, the state's laws need to change which, of course, would require cooperation between the two opposing parties and their members--Republicans and Democrats. As always, that is difficult if not impossible.
And look at Washington. Pitiful! I guess this country has to totally implode before real change and cooperation will ever take place.
To the poster who said it was narcissitic Boomers who voted in Prop 13--not true. The oldest Boomers were 32 in 1978. Prop 13 was the daring of the over 55 anti-government crowd. They sold it as free beer. The bar tab has now come due.
To the poster who said there are fewer students in the k-12 system now, a few facts:
1. 150,000 students drop out of California's high schools every year. 80% of these students
have passing grades. They cite boredom and their classes lack of relevance to their
futures. Career and technical classes have been decimated. The 10th largest economy
in the world needs highly skilled young adults, not dropouts.
2. Over half the country's immigrants settle in Calfornia. 200+ languages are spoken here.
Teaching non-English speaking students takes more resources.
3. In my county, $14,000 per year is spent on schooling a regular student. $40,000 per year is
spent educating special needs students. There are more special needs students now
than in 1978.
I agree that California's citizens share a great deal of responsibility for our state's decline. We've elected fools as governors and legislators for years. One does reap what one sews.
The ironclad rule for "Tax Cuts" is that ultimately somebody pays for them.
The proposition was sold as a way to keep the older generations, who had made huge profits on their houses, from having to pay taxes on their gains.
Prop 13 had nothing to do with the baby boom generation or with the minority of that generation who created the counter-culture. Ronald Reagan was an enemy of the counter-culture, and sent state troopers to tear gas and shoot protesters. Howard Jarvis had no appeal to the counter-culture. Reagan and Jarvis were, in countercultural language, square, uptight, and stupid. No connection.