September 12, 2008


Budget Impasse: Legislatures fiddle while the State crumbles

In the State of California, passing a budget on time is just something that is not done. Every year the State goes through a political ritual of the Democrat and Republican ideological battle, and every year the budget is delayed while these two Parties perform their two step dance.

The difference this year is that as of Sept. 1 this marks the longest time in the history of the State that it has functioned without a budget in place and with State spending at a stand still. The affects of this are showing up where it hurts the most, with the poor and with the small businesses.

Without a budget in place, hospitals, community colleges, day-care centers and other facilities which depend on state funds go without the money they need to operate. This week alone the board of directors at Borrego Community Health Foundation voted to close several clinics in the San Diego/El Cajon, Riverside, Coachella Valley areas. Thousands of low-income, underserved patients will be out of luck and forced to find alternative health care.

The small business owner, which is the economic engine that drives the State, are being severely impacted by the budget impasse as they wait for payments that come either directly or indirectly from the state.

In the meantime the battle over a tax increase versus spending cuts continues.

A majority of the legislatures, the Democrats, and the Governor favor a sales tax increase, while a minority of legislatures the Republicans, call for deep program cuts and a borrowing plan to fix the budget. Due to a 2/3rds majority vote needed to pass a budget the Republicans are able to hold up the budget as they look to have their concerns addressed.

In the meantime the State continues to crumble in particular when you compounded this with the general economic situation with the country as a whole. It is like a double whammy against the poor and small business man.

Taxes are inevitable, a State, a Country, can not survive without taxes. Taxes are good when they provide the services they are intended to and are evenly shared. Herein is the problem, taxes are not evenly shared, the rich continue to pay less than their fair share, as typified by the recent yacht tax that was defeated by the Republicans allowing yacht owners to avoid State taxes. The Democrats are looking to raise the tax on personal income of those who earn more that $162,000. In the meantime the Republicans are willing to cut funding to programs that are provided for the poor.

Of course this is not a one sided issue, it takes two to make a fight and the Democrats have done their fair share to fuel this budget impasse. We can start with the fact that they came out with their budget proposal almost a month late and they presented a proposal on July 8 that they knew would never get out the door, it was DOA, dead on arrival. The Democrats drew a line in the sand on taxes and dared the Republicans to cross over. The Republicans for their part, so far, have refused and are holding the budget hostage until the Democrats give in to their demands for no new taxes.

The Governor Schwarzenegger has shown for all to see that he lacks the leadership skills to bring the two sides together on the budget. You combine this with some of his bad ideas on the budget and you get a recall effort that may, or may not, have any merit but has caused quite a stir up and down the State.

In the meantime the State Legislatures continue to fiddle while the State continues to crumble.

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