hoist w/ our own petards

Hamlet:

There's letters seal'd, and my two schoolfellows,

Whom I will trust as I will adders fang'd—

They bear the mandate, they must sweep my way

And marshal me to knavery.

Let it work;

For 'tis the sport to have the enginer

Hoist with his own petard, an't shall go hard

But I will delve one yard below their mines

And blow them at the moon.

Hamlet Act 3, scene 4, 202–209

Well finally, it looks like the scofflaws in Sacramento, also known as the California Legislature is on the cusp of passing a budget.

It's only taken 14 months and during that time the state's budget deficit grew from approximately $18 billion for one year to over $40 billion for the next 17 months. Balancing what passes for the state's books will require the following revenue increases according the an article in the Feb. 11 Sacramento Bee.

Increasing the state's sales tax by 1 cent on the dollar.

Increasing gasoline taxes by 12 cents per gallon.

Raising the state's vehicle license fee from the current 0.65 percent of a vehicle's value to 1.15 percent, with 1 percent going to the general fund and local law enforcement getting 0.15 percent.

Increasing the personal income tax across the board, either by assessing a surcharge on tax liability or increasing the tax rate.

Ouch. That's right, "Ouch" is what I said to myself when I read the above proposal. Then I remembered that on Jan. 11, I had advocated a reform of Proposition 13, which was fancy way to say that I supported increase state taxes to balance that state's budget. One month of ago I was in favor of the legislature raising taxes in California. Then I read that taxes would be increased and I wasn't as pleased as I probably should have been. Civic virtue isn't as much fun when it comes with a price tag. I was as, Shakespeare would say, "hoist with my own petard."

My dismay at my pending impoverishment the State of California, was eased somewhat when I remembered that our beloved Govinator Arnold Schwarzenegger had been elected in 2003 by advocating repealing recent increases in the "hated car tax." According the Orange Juice Blog, Back in 2003 Schwarzenegger was campaigning against Gray Davis and had this to say about the car tax

“All they have done is spend, spend spend, and when they realize they spend money they don’t even have, then it is tax, tax, tax.” He added “how crazy is that going to be to come up with this crazy idea to raise the car tax by 300%. We’re not going to let it happen. Let me tell you something…it’s going to hurt the person who is a low income person who makes $15,000 to $20,000 a year. The person who is struggling to make ends meet. A person who is struggling to put food on the table for their family.

But my schadenfreude over Arnold's flip-flop from repealing the "Car Tax" to increasing the hated Car Tax, could not sustain me for long. California's fiscal situation is too grim.

The current budget only papers over the problem a few months. According to the Pubilc Policy Institute of California (PPIC). California is one of the few states in the nation to debt finance its public debt. State debt averages out to $4679 per person. New York comes next with a state debt of $2600 per person. Despite this massive state debt, PPIC states that California "will continue to have a 'structural deficit' with spending far exceeding revenues" for years to come.

The only way to avoid this expensive, time-consuming and wasteful state of affairs is to restore sanity to the state budget process. That can be done by eliminating the mandate that a supermajority of 66% of the legislate be required to pass a state budget. Then comes the hard part. According to PPIC

Fiscal responsibility requires getting future spending in line with future revenues and making touch choices about limiting spending as well as seeking additional revenue sources. Reducing expenditures could be achieved through limiting cost-of-living adjustments on current programs, rolling back recent expansions, and reduing benefit levels. Additional revenue sources might include increased use of user fees, limiting tax credits, broadening sales tax coverage, and raising tax rates.

That's more pain in the future. But the fiscal irresponsibility caused by Californians' desire for government services and their unwillingness to properly finance those services needs to come to an end. Tough choices need to be made, taxes will increase and government services will have curtailed. Action needs to be taken now or the annual budget farce will some day have tragic consequences.

Capitano Tedeschi

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