Other People's Money

AUG. 6, 2010

After sitting through another week of state legislative sessions and committee hearings, the phrase “other people’s money” keeps running through my head.

Last week I spoke with Senator Denise Moreno Ducheny, D-San Diego, and that started me thinking — not only about her comments, but about the state’s politicians deciding not to extend corporate tax cuts. “How much more do people want from us?” Ducheny asked. “We’ve been overly kind.”

This week was no different with Ducheny. In a budget committee hearing, she said, “I just don’t know what to do,” about a state program wrought with mismanagement and waste.

California is in a world of hurt. Between 2004 and 2008, total state spending increased approximately 44 percent, dramatically outpacing tax revenues.And it continues to rise. Debt has tripled in just six years. Californians chafe under one of the heaviest income tax burdens in the nation, according to the Washington D.C. non-partisan Tax Foundation.

It’s not the government’s money. Politicians are supposed to be stewards of the state and protect taxpayer money from abuse and waste. But that’s not what’s happening.

Other people’s money is always easier to spend without consequences. The worst that happens to politicians who engage in irresponsible spending is that they don’t get reelected.

Putting spending into perspective is what Californians need to force politicians to do. We need to be asking politicians the following questions:

• Would you take money out of your wallet and spend it on the programs you’ve been voting for?
• If so, what stipulations would you place on the spending?
• And what accountability would you demand from these programs that are using your money?

I hear friends flippantly say, “That’s politics.” But it’s other people’s money that the politicians use in order to continue their profligate spending and expansion of entitlements. Senator Ducheny is not opening up her purse and taking thousands from her own wallet to fund the public health department’s myriad of free health programs. Assembly Speaker John Perez is not offering half of his paycheck to support education or the jobs he speaks of so frequently.

Spending other people’s money usually starts at a very young age. Some parents teach kids about responsibility with money and spending, and others just keep doling it out with no accountability. My son used to refuse to spend his own money, and instead ask me for money to make purchases. I’d remind him that he had money of his own, and if the purchase was important enough to him, he’d have to reach into his own wallet. Often he would change his mind and keep his money, realizing that the purchase was not that important.

Most politicians apparently never learned that lesson. Democrats are masters at spending other people’s money, but plenty of Republicans go along with government expansion.

Last year, three Republicans, including Assemblymen Roger Niello, R-Fair Oaks, and Anthony Adams, R-Hesperia, voted with the Democrats for massive state tax increases.

Niello and Adams didn’t get the memo or even read the tea leaves. For them, it was politics as usual.

An interesting exercise in spending is often done with sales representatives in the private sector. Instead of giving sales reps a company credit card for expenses, companies are requiring instead that sales reps use their own credit cards and submit receipts for expense reimbursement. Amazingly, company expenses always go down, but sales do not.

Accountability removes the entitlement.

It may be more fun to recklessly spend other people’s money, but in the end, the people’s empty wallets will force change. With one more really bad California budget on the horizon, other people’s money will no longer even be an option.

As for talk about the federal government bailing California out – don’t count on it. Economists say any bailout would jeopardize the fed’s AAA credit rating and only open the floodgate for other states in financial trouble.

Eventually, politicians will understand that other people’s money is in short supply.

– Katy Grimes