Once Again: California's Budget Crisis Isn't a Spending Crisis

[courtesy of California Progress Report]

By Robert Cruickshank

Last fall I took the LA Times to task for framing the state budget crisis as a problem of "automatic" spending, and not being sufficiently attentive to the structural revenue shortfall that is the true cause of the budget problem.

While the LA Times has shown some improvement - George Skelton's column yesterday is mostly if not completely on target and the incomparable David Lazarus always has some good insights - the rest of the state's media seems slower to follow.

Take, for example, Sunday's Sac Bee column from Daniel Weintraub, California Budget 101: What went wrong, when. Weintraub's column purports to be a "a fuller explanation of the dimensions of the problem" - but winds up repeating the same discredited arguments, namely that this is primarily a spending problem:

"But the economic issues only worsened a basic, structural problem in the state budget: Spending is programmed by law to grow each year at a rate that is generally faster than tax revenues can match. Current state law would push general fund spending to $113 billion next year if nothing is done to slow it, according to the Schwarzenegger administration. Revenues, meanwhile, are projected to decline further, to about $95 billion. The budget Schwarzenegger celebrated last summer would have bridged the gap for one year at best.:

Weintraub then goes on to detail the education, health care, prisons and transportation spending that makes up that growth. But nowhere in his column would you see the following:

• Tom McClintock and Arnold Schwarzenegger's $6 billion VLF cut
• Another $6 billion in tax cuts made to the state budget after 1993
• And of course, the start of the state's budget problem: Prop 13.

In other words, Weintraub makes it sound like the state is in a budget crisis because it is overspending, instead of because it is undertaxing. This is especially important when we consider what the state has been spending on - education, health care, and transportation - the very things California needs to remain competitive in a globalized 21st century economy.

The aforementioned George Skelton column provides an excellent contrast, showing what a more accurate explanation of our budget problem would look like: