Arnold's budget: More cuts needed
I’m working on a longer piece on Gov. Arnold Schwarzenegger’s 2010-11 budget proposal [pdf]. My preliminary thoughts:
It’s a start on reducing a projected $19.9 billion deficit. It cuts spending an additional $8.5 billion, shifts $4.5 billion in spending, and anticipated $6.9 billion more from the federal government. So only the $8.5 billion in spending cuts is real.
The “shifts” are gimmicks, as they call them in Sacramento. And getting more from the feds is just wishful thinking. That leaves $11.4 billion in illusory “cuts” that will have to be made up somehow.
And we don’t know how well the economy will perform this year and in 2011. In 2011, halfway through the state’s fiscal year, taxes rise sharply (as Bush’s tax cuts expire), which will hit the economy hard.
This is just the opening salvo in the budget wars. This year, unlike last, is an election year, and Republicans will be less likely to give up their “no new taxes” pledges — unlike last year, when the GOP leadership in the Legislature caved in to Arnold’s tax obsession and jacked up taxes $14 billion.
To quote another action hero, Mr. T in “Rocky III,” the budget fight will bring …
— John Seiler
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