CA shakedown headed for a breakdown

June 4, 2012

By Katy Grimes

California legislators looked as if they were working hard last week, with hundreds of bills to debate and vote on. But it wasn’t difficult to see that much of it was for show. They seem to want everyone to think that what they do is challenging, and only they are qualified to run the state.

But anyone who earned even a “C” in Economics 1A could tell you that legislators working to pass hundreds of bills can’t be good for California–especially when they should be working on the budget, and only the budget.

Bills to tax, regulate and spend were passed, and government reform bills were killed. It was business as usual in California’s Capitol. It must be easy and fun passing spending bills, and everyone looks busy and productive.

Too many of California’s politicians honor processes and procedure more than policy.

In California, all of the pomp and circumstance of the Legislature is for naught as long as the state has a historically high debt, a cash crunch, is losing businesses, losing tax revenue, losing taxpaying residents and penalizes productive citizens for living here.

Big government, big labor, big business

California has lost its innovative and manufacturing edge, and has instead become a state of big government, big labor and big business. But even the big business is not expanding in California. More than 200 companies, including Direct TV, Intel, Google and Cisco are expanding outside of California or leaving the state altogether at a record pace.

Joe Vranich, who monitors business departures in California, reported, “Two years ago when Hilton Worldwide moved corporate headquarters from Beverly Hills to McLean, Va., the company said approximately 80 percent of the employees invited to move east accepted the invitation.”

Vranich found that “254 California companies conducted ‘disinvestment events,’ that resulted in some or all of their jobs being placed outside of California in 2011.”

Politics killed manufacturing and the Central Valley agriculture business, and it is politics that will continue driving the remaining businesses and industry away.

Green is the new red

“I oppose yet another green bill, which requires the spending of greenbacks, when we are in the red,” Assemblyman Don Wagner, R-Irvine, said last week during floor debate. Wagner was commenting on AB 2583 by Assemblyman Bob Blumenfield, D-San Fernando Valley, which, when purchasing new vehicles, would require the state’s Department of General Services to purchase more expensive green vehicles. Fifty percent of  new purchases must be green by January 2013 and 100 percent of new purchases must be green by 2015.

(Editors note: In the interest of clarity,  Assembly Bill 2583 would require the purchase of new, green vehicles for the Department of General Services when current vehicles are retired. It would not require the replacement of existing, working vehicles.)

Wagner was right—the state is in the red, has no extra greenbacks, and is spending money it does not have.

But that hasn’t stopped this Legislature, which fancies itself the greenest body of lawmakers in the land — at any cost. Every legislative committee hearing and floor session sees many “green” bills requiring additional state spending, taxpayer subsidies, tax increases, fees and penalties, as well as adding to the thousands of pages of regulations on the state’s residents.

California residents are so heavily regulated, that at any given time in this state, everyone is undoubtedly violating some law or regulation for which one could be cited, fined or jailed.

Brown should see red

Since he has been governor, Jerry Brown, a Democrat, has given a total pass to the Democratic-controlled Legislature, and not made them work for much of anything, including pension reform or any meaningful budget or state worker cuts.

California labors under 12 public employee unions, representing 182,000 workers in total.

The state budget is actually $137.3 billion total, with a general fund budget of $92.6 billion, $39.8 billion in special funds and approximately $5 billion in bond funds.

Of the $92.6 billion state budget, Brown proposed 5 percent in payroll cuts by reducing the state workweek to 38 hours, across four days. This is supposed to result in $839 million overall savings. But the Sunshine Review reports that only about $402 million of that savings would come from the $91 billion general fund.

And many doubt that unions would even agree to the change.

The Sunshine Review noted that the proposed budget as presented, however, does not include $70 billion in federal funds and public pension payouts of approximately $50 billion. Adding those in, and state expenditures will be closer to a quarter-trillion dollars.

While other states have figured out that reducing taxes, cutting government spending and sincere pension reform are essential and actually stimulating, California is instead headed the opposite direction — right into the open arms of Greece, and bankruptcy.

Numbers don’t lie—rugs and people lie

With labor unions calling all of the shots in California for the past several decades, California state revenue has fallen $30 billion since 2007, according to the Sunshine Review.

The real state deficit is not the $16 billion reported by Brown—it’s actually well over $40 billion or higher, with billions owed to education and the federal government.  And even with this massive deficit, Brown proved with his May Budget Revise that he is still calling for $70 billion in tax increases, $4.6 billion additional spending and $200 billion in new spending on a High-Speed Rail system that voters don’t want, and don’t trust the state to build.

And experts say that California’s real unemployment rate is closer to 22 percent.

With no reforms of any kind, no plan to repair the agricultural carnage in the Central Valley, no plans to plug the business leakage, growing unemployment, and the increasing high-school drop out rate, Brown and Democrats are leading California right into a crash and burn.

Perhaps Gov. Brown should make “Shakedown” his new theme song. Brown and his public relations folks can spin this any way they want to, but the numbers don’t lie—California’s shakedown is now headed for a breakdown.

 

Shakedown (Beverly Hills Cop 2 Soundtrack)

lyrics by Bob Seger

No matter what you think you pull
You’ll find it’s not enough
No matter who you think you know
You won’t get through
It’s a given LA law
Someone’s faster on the draw
No matter where you hide
I’m comin’ after you

No matter how the race is run
It always ends the same
Another room without a view awaits downtown
You can shake me for a while
Live it up in style
No matter what you do
I’m going to take you down

Shake down, break down, take down
Everybody wants into the crowded light
Break down, take down, you’re busted
Let down your guard, honey
Just about the time you think that it’s alright
Break down, take down, you’re busted

This is a town where everyone is reachin’ for the top
This is a place where second best will never do
It’s okay you want to shine
But once you step across that line
No matter where you hide
I’m comin’ after you