Considering California political history, a big payday is in store for political campaign consultants and funding from political action committees to protect the special interests at stake.
Overall, it will cost more to buy things (sales tax increase) and general income tax increase. The devil is in the details and there are few details available.
As posted on my BLOG on Mar 17, 2009:
Without much of an intermission, the California budget fiasco roared to life with revelation that spending is exceeding revenue and an additional $8 billion shortfall is expected.
There is a profound observation by John Adams - “In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a congress.”
Or, in the case of California, change “congress” to “legislature”.....
According to news reports, there is a flurry of activity to figure out how to raise taxes even more.
Seems the “budget cuts” from Round 1 were only reductions on amounts proposed to be spent. That is still an INCREASE from previous spending levels.
And, the shortfall continues, the spending continues, and no one wants to propose real solutions......
The first step in triage is stop the bleeding. In the case of government, stop spending more than you have....
The “Ugly Budget” - Round 3 is coming....
The infamous ‘special election’. Can’t wait for the puffing and posturing.
As posted in my BLOG on May 4, 2009:
Okay, the California legislators managed to pass a state budget that depends on getting the voters to approve certain steps.
Within days of passing the budget and declaring the state in in financial harmony, word came out that the state budget is another $8 billion plus in the deficit column. So much for financial harmony.
That brings us to Round 3 of the “Ugly Budget”. A special election (at significant cost to the state - increasing the deficit) is scheduled for May 19. On that day, voters will accept or reject some combination of five ballot propositions.
Prop A ensures that selected residents will pay higher state income tax and EVERY person that buys something in the state will pay an increased sales tax. In addition, funds will be set aside in a “rainy day” account.
Funny thing about the “rainy day” account. Funds are only applied if certain conditions are met. And, due to a companion proposition (Prop B), there is little chance of those conditions being met.
You see, Prop B “restores” funding for schools. But, the “restored” funds is funds that were never taken away, because they were not in the budget to begin with. The “cuts” to the education budget reflect a reduction in that amount that was REQUESTED, which was a significant increase (greater than inflation) over the past year.
The “doom and gloom” pundits are now tugging at the heart strings predicting dire cuts in fire fighters and police officers if Props A and B don’t pass.
Seems as education has taken a back seat as recent frivolities within the state system have shown significant waste within the education system.
Voter polls have four of the five propositions sitting with about a 40% approval rating.
So, the special election is coming. The “elected” representatives have failed to do due diligence and exercise fiduciary responsibility. They bounced that hot potato back to the voters.
Will the voters exercise fiduciary responsibility and bounce the hot potato back to the legislature?
Exciting times await. May 19 will be an interesting day. And, the days leading up will be spin to make your head spin....
As posted in my BLOG on May 20, 2009: