The California Budget Mess Is Spending Unrestrained

California income tax refund checks were due to be mailed out today. However, State Controller John Chiang has said he will hold back the refunds for at least 30 more days because the state must close a $15 billion shortfall in its current budget and needs the cash for more pressing payments, including debt service.

The problem in California is that it can’t stop spending money that it does not have. The fact is California’s budget has grown by a whooping 50 percent over the last five years. Each month California spends $600 million more than the state takes in. The sad reality in the United States is that forty five other states are also having similar budget problems

So, why is California on the brink of the financial abyss? The state's fiscal troubles largely stem from its reliance on personal income taxes. This revenue stream dries up when recessions hit and unemployment soars. Meanwhile state politicians look forward to their next election and spending continues unrestrained.

Since education makes up more than 50% of California's budget, a review of the states financial problems should start there. The truth is that California has nearly 3 million illegal immigrants which cost state taxpayers more than $9 billion each year. Educating the children of illegal immigrants is the largest cost, estimated at $7.7 billion each year. Medical care for illegal immigrants and incarceration of those who have committed crimes are the next two largest expenses measured in various state studies. In total, the cost of supporting illegal immigrants in California is pretty close to the amount of the entire budget deficit for the current fiscal year.

Other State funded entitlement programs are also on the rise as revenue falls due to the deep recession. The number of Californians receiving food stamp benefits increased by 13.8% for the year ending September 2008, while the number of families receiving cash assistance from the CalWORKs welfare program rose by 5.9%, according to the California Budget Project.

California politicians will soon raise various state taxes and cut some spending to close this years budget deficit. As a result, state refund checks will eventually be mailed to beleaguered taxpayers, who will have to pay even higher taxes in the future .

However, the underlying problems of entitlement spending and illegal immigrant state support will remain and the California taxpayer can only expect more of the same. The current California budget mess is a result of years of spending on entitlement programs and illegal immigration that was unrestrained.

http://www.eworldvu.com 

Comments

[caivp]

On Wednesday, despite steep odds, Gov. Arnold Schwarzenegger and state Assembly and Senate leaders announced that a fragile $40 billion accord to close the state's deficit through June 2010 had been reached. For this plan to succeed, Republicans are going to have to agree to vote for tax hikes and Democrats are going to have to agree to vote for deep spending cuts.

http://www.caivp.org/article/issues/2009/2/13/two-capitols-two-melodramas

[Bible Audio]

California’s inflation-adjusted per-capita spending has been nearly flat for more than 30 years. The state’s deficits come not from a spending binge, but from tax reductions adopted without cutting spending. Neocons promoted this “Starve the Beast” strategy as a way to cut otherwise too-popular programs (eventually), and sometimes even scared Democrats into going along (Jerry Brown reacting to Proposition 13)..

Bible Audio