All options must truly be on the table

by Brian Leubitz [courtesy of Calitics - Front Page]

Arnold likes to talk a big game about putting "all options" on the table. In fact, if you search for Schwarzenegger and "all options", you get almost 18,000 results. Now, admittedly, many of those are from eBay, so 12,300 without the ebay results. Which, by the way, it must hurt to see your DVDs selling for 1 cent. Ouch! Anyway, the point remains that he talks about all options being on the table a lot.  But, for some reason, all options are not on the table in the budget fight. You see, Arnold has said he will not raise additional revenue. No tax hikes and all that Reagan BS.

So, we move on to Arnold's lame-o "cuts only" budget.  It's a ridiculous budget that can't possibly be anything that's connected to reality.  So, Arnold either has a plan to float MORE bonds to cover our day-to-day expenditures or is playing some game with his Republican friends.  And, if it's the bond idea, well, let's just say that I'll be using this picture of Arnold "cutting up the state's credit card" a lot for the next few months.

This budget deficit cannot be tackled by cuts alone. Well, it can, but it would be disastrous for the state, and we would be in the same situation in a few years when we hit another downturn.  We are just too reliant on the boom/bust cycle that is inherent to the income-tax based revenue system that we currently use.

Now, this is where Fabian Nunez comes in. Yesterday, he said he would be willing to meet the Governor half-way. Raise half of the gap by revenue increases, and cut for half. Personally, I think he gave too much here by giving that much.

Assembly Speaker Fabian N??ez said Tuesday that he could support raising revenue - including selective taxes on the wealthy - to help bridge the state's projected $14.5 billion shortfall.

N??ez said that a "fair compromise" would be to solve half of the money crisis with revenue increases and the other half with spending cuts.

The Los Angeles Democrat, speaking at a lunch meeting of the Sacramento Press Club, said he could support the 50-50 approach used by Gov. Pete Wilson when faced with a similar budget crisis in the early 1990s. (SacBee 2/13/08)

I agree that the 50-50 compromise wouldn't be terrible, but that alone doesn't address the long-term needs of the state. We need a revenue overhaul. Sure 50-50 is better than a cuts only budget, but it is not long-term thinking. We'll get into the next boom, decide we're having "good times" and then give ourselves another tax cut instead of saving for the next bust. It's the nature of politics. It's also one of the reasons I supported Prop 93, it is too easy for electeds to just pawn the problems off on whomever is next.

What we need is somebody who understands the state financing system to sit down and really figure out what needs to happen to get us back to solvency. Somebody like, say, John Laird. I say John Laird b/c nobody knows this stuff better than him, and he wrote an awesome LA Times op-ed that's no longer on their site, but does appear on the Hanford Sentinel website. Follow me over the flip.
We discussed this in depth when the op-ed came out last November, and Robert's great LA Times op-ed reinforced it, but it's worth repeating:

But the chronic boom-and-bust budget cycle is rooted in a simple problem: Californians generally believe in government and want it adequately funded -- so much so that they repeatedly have voted for laws or constitutional amendments that lock in guaranteed spending for, say, education or transportation. At the same time, the state's revenue system is antiquated and volatile. It is heavily reliant on income taxes, for instance, and so the pains of an economic downturn have a magnified effect on state revenue.

The short-term solutions that get us through on a year-to-year basis all have been tried -- and tried. It's time for bipartisan hard work to bring California's long-term spending demands into balance with long-term revenues. It won't be easy, but the easy paths have been taken, and they've left the state awash in red ink.(LAT and Hanford Sentinel 11/28/2007)

So, this time, Arnold, All options must really be on the table. If you want to tape together that damn credit card, why don't you bring out the checkbook too. The Republicans, and the Democrats, need to abandon their shady pledges they made to lobbyists and think of what is best for the state, not what is best for Norquist and his gang of thugs. California deserves better.