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The Golden State is killing the golden goose

Right Here, Right Now

Posted: July 14, 2008 12:53 a.m.
Updated: September 14, 2008 5:04 a.m.
 

When I was about 10 years old, my parents taught me some very important lessons about the basics of money. You earn it, you pay taxes on it, you save some, you give some away, and you spend the rest.

They taught me to always make sure not to spend more than I had; otherwise I'd get myself in trouble. I was also told that when times get tough, and you can't afford the things you want, you cut back your spending.

Most importantly, my parents said that I should never put myself in a position in which I was living so far beyond my means that I could not recover.

Apparently, the Democrats in our state Legislature didn't have anyone to teach them these basic principles.

Let me start by saying this: While I am upset with the way Sacramento Democrats are handling the state budget issues, I am equally disappointed with how our federal Republican representation has recently drifted away from the basic policies of fiscal responsibility that used to be integral to the traditional platform of the GOP.

Many voters now perceive Republicans as the party of big government, which must have Ronald Reagan rolling over in his grave. At least our presumptive Republican nominee for president, John McCain, has articulated the need for Congress to return to a policy that would see lower taxes and curtailed spending to balance the budget, rather than the other way around - which is unlike the platform of the Democrats in Sacramento.

With that caveat addressed, let me provide some context for my discontent. Despite tough economic times, California had a gross domestic product of about $1.7 trillion for 2007, with over $134 billion in exports. California currently boasts five of the top-10 most expensive communities to live in within the United States.

According to some reports, if California were an independent nation it would have the seventh largest economy in the world. For years, the Golden State has had the Golden Goose that so many other states, and other nations, envied.

Yet we still have a $17.2 billion state budget deficit, which is over 10 percent of our annual GDP. While our great state's per capita income places us eleventh in the country, we pay the fourth-highest tax burden.

Additionally, California has the second highest rate of residential real estate foreclosure in the nation.

So the question becomes, with such relative financial success and potential for growth, why does this state have such a monumental financial problem? A big part of the problem is that the California Legislature seems incapable of approving a balanced budget.

Democrats in the state Legislature recently introduced their state budget proposals, which call for combined tax increases of nearly $11.5 billion! Their proposed budget also has rejected nearly every single spending reduction that was suggested earlier this year by Gov. Arnold Schwarzenegger.

Instead, the Democrats have proposed to increase spending on a number of health and welfare programs to the tune of nearly $3 billion for next year alone.

Benjamin Franklin once said, "Certainty? In this world nothing is certain but death and taxes."

I completely understand that taxes are an inevitability, and are necessary to help build and maintain infrastructure, and to provide public services and public safety. But what I don't understand is why the Democrats in our state Legislature believe it is acceptable to the voters of California to raise taxes, rather than curtail spending, as a cure to the state's economic problems.

The voters of this state have repeatedly expressed their disapproval of this type of "remedy" for an unbalanced budget. A recent Field Poll of Californians shows that 63 percent want to see the budget deficit addressed through reduced spending, while only 26 percent agreed to raise taxes in order to balance the budget.

In a time when voters are being forced to tighten our belts in order to offset rising costs of gasoline, food and the basics of life, why is it acceptable for our representatives to take an opposite approach?

As voters, it is time to send a message to our leadership: If we have to make sacrifices, you should too!
Our state and federal governments should be forced to live within their means, work with what they have, and cut back spending the same way voters do in order to balance their household budgets.

Unfortunately, our Democratic legislators (and to some extent a number of Republicans) aren't listening to 62 percent of their constituents and feel that the best way out of this tough financial situation is to spend more.

Based upon the simple lessons I learned when I was 10, I can tell you this plan just won't work.

If our leadership in the California Legislature fails to make more careful, well-reasoned decisions in the next few years, the Golden State may wind up killing the Golden Goose!

Brian Koegle is a local attorney. His column represents his own views, not necessarily those of The Signal.

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