What has the State Done with Your Money? Rethinking the Role of State Government.
Lamenting the recent budget axe and waxing eloquently about the ''good ole days'' when voters willingly paid taxes to state government, the LA Times in it's budget recap last Sunday begins: ''Forty-two years after [Governor] Pat Brown (D) left office and 13 years after he died, his California took quite a beating last week. The visionary governor swept into office in 1959, and by the time he was swept out eight years later, he had created the 16-dam, multiple-aqueduct state water project, devised the three-tier college and university system, constructed nine major campuses and built more than 1,000 miles of freeways to connect regions of his burgeoning state. To this day, much of what gets us where we are going -- literally and figuratively -- stems from what he did in his two terms.''
Did Pat Brown's California really take a beating last week? I think not. One has only to look at the condition of his legacy to understand that the universities, roads and water systems taxpayers willingly paid for under his watch have been taking a ''beating'' for years. The state's budget now focuses on social services, wealth and property redistribution schemes, and supporting Union mandates. Public safety gets an ever-shrinking part of the budget pie, while welfare and
K-12 education, consume most of the remainder. Building and replacing public infrastructure is cast out in the hinterland with future bond funding (more debt for you to pay), and is gobbled up by environmental mandates and regulations. The result – while taxes keep rising, there is no bang for the buck or no bucks left for goods and services people expect state government to provide.
What really occurred, due to the overwhelming voting dominance of the majority party (nearly 2 Dem to 1 Rep), was that the welfare state got modestly reduced, public safety got the axe, and we acquired more debt.
With the rejection of the May 19th propositions, the State simply ran out of money to borrow. Therefore, I view the adverse economy as a great opportunity for a much more positive and long lasting debate: The California taxpayers are once again challenging the proper role of state government. Similar to the 1970's, when homeowners were being driven from their property due to skyrocketing taxes and revolted with Prop 13, California's new tax revolt and commensurate budget whack, is because the people paying taxes, Democrats, Republicans and Independents alike, are forking over penalizing taxes but do not see state government working for them.
Via the ballot box California voters continually pass new ''bond'' or future debt proposals for ''public goods'' such as water, transportation, education and public safety that get gobbled up in regulation. Case in point: the state has nearly $60B in debt outstanding and another $50-60B in voter approved bonds that we simply cannot fund due to our burgeoning debt. Where are the improvements?
Unfortunately, the responsibility for many of these tangible goods, and now even power generation, has been thrust upon local government, without the authority to move forward or dollars with which to do so. Hence, local government is also taxing and bonding (incurring debt) separate from the state to meet their constituent's needs, albeit with much state interference and raids on their coffers.
Again quoting the Times article reminiscing the 1960's I: "It was easier to mount the argument that government by and large did good things, and we ought to pay for it, and the people who benefited the most should pay the most," said Rarick, Director of UC Berkeley's Robert T. Matsui Center for Politics and Public Service.
I'll take a flyer here – The difference between the voters of the 1960's and now is that the people benefiting the most from state services are not paying, and the people paying no longer benefit. Such is the result of the shift to the ever-expanding regulatory role of government and ''service industries.'' We now boast aging roadways, no water, and an inaccessible and expensive college and university system plus a massive debt burden. We also claim the dubious distinction of being one of the highest taxed States in the union, with the most unfriendly business environment.
So, as painful as it is, this recession and lack of money has finally forced the opportunity to rethink and restructure California's future. I welcome the debate!
For more information on the July 2009 Budget Package, please visit the Legislative Analysis Office at - http://lao.ca.gov/laoapp/PubDetails.aspx?id=2112