The Legislature’s budget analyst, Mac Taylor, declared today that the immense package of spending cuts, new taxes and loans aimed at closing the state’s $40 billion budget deficit will fall short by $8 billion because the state’s economy is continuing to falter.
“Unfortunately, the state’s economic and revenue outlook continues to deteriorate,” the Legislative Analyst’s Office (LAO) said in a review of the package, which covered the remainder of this fiscal year and all of the next.
The LAO report will renew the Capitol’s partisan and ideological squabbling over spending cuts and new taxes and fuel calls on the left for even more tax increases and those on the right for deeper spending cuts. The full LAO report may be found here.
The report goes on to note the not only are we likely to tap another barrel of red ink before year end (3 months) but that we can expect more of the same into next year, and the year after, the year after and the year after. 2014 is as far out as he goes.
And why is this happening? And with the budget only recently passed? Well according to the LAO it’s because “revenues will fall short of assumptions in the budget package by $8 billion.”
Or, as Sen. Hollingsworth put it “this revenue deficit is not IN SPITE of the tax increases but BECAUSE of the tax increases.” Put simply, it you take an extra $1,100 to $2,000 a year out of the average taxpayers pocket for the government to spend, that is money that person doesn’t have to spend. They will not be buying a new car or a new house, they will forego dinners out and new furniture and home improvements, they will not take a vacation or otherwise spend that money BECAUSE THEY DON’T HAVE IT! Only government can spend money it doesn’t have – not people.”
And if they’re not spending it on cars and boats and movies and dinners out, well, the providers of those services are making less also. But again unlike the government who keeps hiring people when the money runs out, normal businesses have to lay people off or, if it gets bad enough, they shut down or move their business to another state that’s a little smarter and cheaper. But all of those eventualities result in less revenue to the state from individuals and businesses so the legislature will want to raise taxes even more to off-set those reductions. It’s a Democratic death spiral friends, and we ain’t done yet.
Budget analyst Taylor summed up the situation thusly, “…to close the newly discovered $8 billion gap, the state should maximize its use of federal “stimulus” funds.
So a big shout out to all you responsible states out there – THANK YOU FROM CALIFORNIA. But can you get us a bit of an advance? We’re binding up a little in the shorts again this month – our diet for pork has not yet been sated.
Keep voting for hope and change folks, it’s all we’ve got left. Of course that’s just my opinion – I could be wrong.
the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR, or any local or state government or other mental institution.