Califonia’s Balanced Budget is a Catastrophic Economic Tsunami

In 2010, to help motivate our Legislators, Californians voted to dock legislative pay when the State’s budget is not passed on time. We should have known our slimy representatives would find a shameful, selfish and inevitably destructive way to game the system, avoid the rules, lie to Californians and still get their money. From Katy Grimes at Cal Watchdog:

The Legislature met its constitutional budget deadline, which means legislators will not be docked their pay this year. However, claims by legislative leadership that this budget really is a balanced, honest budget, free of gimmicks and accounting tricks were met with guffaws, anger and stiff verbal sparring on the floor of the Senate and Assembly Friday.

The Democratic Legislature did manage to make some cuts, though:

“I finally realized that education really is the Democrats’ priority… for cuts,” Assemblywoman Shannon Grove said Friday. Of the $6 billion in trigger cuts, $5.9 billion will be cuts to education.

They’ll find a way to blame Republicans. But I digress. The article continues:

Grove stirred up emotions in the Assembly when she dared to direct a question to the author of the budget bill.  ”Let me get this right,” Grove said, directing her question to Assemblyman Bob Blumenfield, D-Los Angeles. ”We just passed the budget bill, and now we are being asked to pass the budget bill junior because the first budget bill is already out of balance?”

Her question caused Assembly Speaker John Perez to appear out of nowhere like a ninja, and pound on the podium with the gavel with a force rarely heard in Assembly chambers. Perez and Assembly Majority Floor Leader Charles Calderon took Grove to task over the geographical direction of her question… apparently Perez wanted her question directed toward all of the Assembly members, and not just at the bill’s author.

Grove handled the dust up with aplomb, and made her point. And that was the point–she was pointing out that the budget bill is a sham. Democratic leadership didn’t want this in the record, and they tried to stop her.

The budget was so bogus, an immediate secondary bill was required to balance the newly-balanced budget. You can’t make this stuff up. And sadly, maddeningly, our progressive betters continue to sound like a broken record:

The Governor is counting on bringing in $45 billion with his tax increase, and says that this money is needed to keep up with state spending. But what he hasn’t admitted is that this money would go to pay current state expenses.

Did you catch that? Needed to keep up with spending! Breathtaking. It’s a runaway train controlled by lunatics. Worse, about those taxpayers:

“Already, California has seen a migration of upper bracket taxpayers out of the state. It has the worst credit rating out of all 50 states at single A minus.”

So let’s summarize: The budget is a dodge, our legislators are not serious, their solution doesn’t mathematically work, and there are very real signs that the endgame can’t be wished away:

Standard & Poor’s is threatening to downgrade California’s outlook if lawmakers don’t balance the budget without gimmicks. “We are  being disciplined by our lenders who will downgrade us for fudging,” said Assemblywoman Diane Harkey, R-Dana Point.”

And if you’re not concerned because you’re not in California? Be ready to share the pain. Let these numbers sink in:

California’s economy is nearly one-eighth of the entire country’s gross domestic product. It totals 30 percent of the debt carried by all 50 states, according to Gabriel Petek, an S&P analyst.

Sure, you can hope it won’t have an impact. Good luck with that. The numbers should be enough to make everyone realize we’ll all have to carry the weight of bloated California’s failure. Grimes comments,

Wall Street bankers are forcing California to clean up its financial mess in order to prevent a catastrophic economic tsunami.

And it can’t be repeated enough that the liberals in charge can’t see any solution but taxation. It’s incredible:

Petek, interviewed by FOX Business, said that California is overly reliant  on personal income taxes, and that the state’s tax structure is behind the deficit because of this reliance.

While the budget has been declared as balanced, California is starting off the new budget year with a $63 billion deficit, according to one financial analyst I spoke with.

S&P is not fooled any longer by California’s budget trickery. Gabriel Petek, and analyst with S&P reported, “for California to rely on capital gains tax revenue from things like the Facebook initial public offering is like looking for change in the seat cushions.”

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