Alas, a Blog

A discussion in comments, combined with waking up early and having some time to pass before Kevin picks me up to go to work, led me to read up a bit on California’s budget.

The most useful graphic comes from the San Jose Mercury News.

So the largest chunks of California’s budget woes are the justice system, the health care system, and a tax cut.

Another big chunk — not included in the Mercury’s graphic — is that the recession has lowered both sales tax and income tax revenues, as people earn and spend less. California has, both through elected officials and through voter initiatives, made major cuts in the relatively recession-proof taxes (car taxes, property taxes). Meanwhile, increases in people needing aid means that spending rises in a recession. As a result, California’s budget is hit harder by a recession than most states.

The article accompanying the graphic is very worth reading.

For more background on how this situation came to pass, I’d recommend reading this blog synopsis of a presentation by Professor Scott Frisch. The blog also links to Professor Frisch’s powerpoint slides, which are worth browsing through.

From the Mercury article:

So looking at the past five years, where did that “extra” $10.2 billion of state spending above the rate of inflation and population growth go? The Mercury News found:

# The state prison system received the biggest share, about $4.1 billion of it. Corrections spending has increased fivefold since 1994. At $13 billion last year, it now exceeds spending on higher education. Tough laws and voter-approved ballot measures have increased the prison population 82 percent over the past 20 years. Meanwhile, former Gov. Gray Davis gave the powerful prison guards union a 30 percent raise from 2003 to 2008, increasing payroll costs.

# Public health spending — mostly Medi-Cal, the state program for the poor — received $2.9 billion above the rate of inflation and population growth. Part of that spike is due to an aging population; part is rising national health care costs. But state lawmakers also expanded Medi-Cal eligibility among children and low-income women a decade ago, increasing caseloads.

# Schwarzenegger’s first act as governor, signing an executive order to cut the vehicle license fee by two-thirds, blew a large hole in the state budget. It saved the average motorist about $200 a year but would have devastated the cities and counties that had been receiving the money. So Schwarzenegger agreed to repay them every year with state funds. That promise now costs the state $6 billion a year, or $2 billion more than the rate of inflation and population growth since early 2003.

Most Democrats in California would agree to balancing this mess with a combination of service cuts and tax increases. Unfortunately, proposition 13 requires two-thirds of the legislature to agree before ever raising taxes, and the Republican minority will not agree to any tax increases at all (although most of them support both spending increases — not all “tough on crime” measures are voter initiatives — and tax cuts).

Look again at Schwarzenegger’s executive order cutting taxes. Schwarzenegger expressly structured this so that no spending cuts would balance his tax cut. This is a textbook example of Republican/conservative fecklessness and irresponsibility — the difficult, grown-up work of paying for tax cuts — either by raising revenues elsewhere, or by making spending cuts — is always deferred.

Which relates to a larger problem: Americans want government services, but they don’t want to pay for them. This basic tendency is made worse in California by the voter initiative system combined with the two-thirds requirement, but it’s a problem throughout the United States.

And our politics makes the problem worse — and this is as true nationally as it is in California.

In California, passing a budget or raising taxes requires a two-thirds majority in both the state’s Assembly and its Senate. That need not pose a problem, at least in theory. The state has labored under that restriction for a long time, and handled it with fair grace. But as the historian Louis Warren argues, the vicious political polarization that’s emerged in modern times has made compromise more difficult.

All of this, however, has been visible for a long time. Polarization isn’t a new story, nor were California’s budget problems and constitutional handicap. Yet the state let its political dysfunctions go unaddressed. Most assumed that the legislature’s bickering would be cast aside in the face of an emergency. But the intransigence of California’s legislators has not softened despite the spiraling unemployment, massive deficits and absence of buoyant growth on the horizon. Quite the opposite, in fact. The minority party spied opportunity in fiscal collapse. If the majority failed to govern the state, then the voters would turn on them, or so the theory went.

That raises a troubling question: What happens when one of the two major parties does not see a political upside in solving problems and has the power to keep those problems from being solved?

If all this is sounding familiar, that’s because it is. Congress doesn’t need a two-thirds majority to get anything done. It needs a three-fifths majority, but that’s not usually available, either. Ever since Newt Gingrich partnered with Bob Dole to retake the Congress atop a successful strategy of relentless and effective obstructionism, Congress has been virtually incapable of doing anything difficult because the minority party will either block it or run against it, or both.