On Tuesday last week California jumped off a cliff. You could
call it a case of assisted suicide — economic suicide. California
had been contemplating the action for a long time, making several
tentative efforts to do itself in. Finally, it was the advice of
Dr. Jerry Brown, the well-known assisted suicide specialist, who
made the convincing argument.
The patient had a terminal illness. The medical term for it is
“gross fiscal irresponsibility.” If not treated, it leads to total
collapse of all systems. Having ignored the symptoms, California is
now in the late stages. Here are some listed on its chart:
- $200 billion in unfunded liabilities for public worker
retirement benefits.
- $106 billion in voter-approved bonds the state hasn’t sold
because it can’t afford the debt service costs (including a $9.5
billion “down-payment” on a $50-90 billion “high-speed”
train).
- Deferred payment of required $10 billion to schools.
- Years of large annual budget deficits, “balanced” by means of
accounting tricks and deferred payments.
Brown has called the budget “a pretzel palace of incredible
complexity.” He said he would fix it if only the voters would pass
Proposition 30 on last week’s ballot. If they did not, he warned,
there would be deep cuts in education and social services. Scare
California voters over the word “education” and they will usually
do what they are asked to do. They did it once again in the case of
Prop. 30. College students turned out in large numbers, worried
that its failure would drive up their tuition. Many parents worried
that classes would grow and instruction diminish, yet California in
recent years has ranked in the bottom 20% of all states for test
scores — despite its $50 billion annual education budget.
California already spends half of its total annual budget on
education. The Teachers’ union spent $100 million to pass Prop. 30
and defeat Prop. 32 (which would have stopped the union from
spending members’ dues on politics without their consent).
The top income tax rate now will go up to 13.3%, easily the
highest in the nation (rich people will do as they have been doing
in growing numbers, move to low- or no-tax states). The sales tax
is going up, too, from 7.25% to 7.5%. (Most cities add 1% or so to
that for local use.) The measure is supposed to “sunset” in a
few years, but as Ronald Reagan once said, “The nearest thing to
eternal life we will ever see on this earth is a government
program.”
Meanwhile, it will generate about $6 billion the first year,
versus a budget deficit of approximately $16 billion. Some fix.
The teachers’ union spends $250 million a year on politics. This
has proved to be a good investment. This year it got them passage
of Prop. 30 and defeat of Prop. 32 and enough victories of its
almost wholly-owned state legislature that added to the majority’s
total. Result: two-thirds majorities in both houses, making it
possible to pass any and all spending measures without the “brake”
of minority restraint.
When and how did this begin? Back in the late 1970s when Jerry
Brown was a young man and governor the first time, he planted the
virus by permitting public employee unions to engage in collective
bargaining. Gradually, but inexorably, this has led to domination
of Sacramento by them, thus to extremely generous pensions and
benefits. Democratic majorities in the legislature have become ever
greater, thanks to the largesse bestowed on them by the
California’s richest special interest. All so that a state could
commit economic suicide.
