Posted by Tina
Our lawmakers have a trick for you this Halloween. Starting Sunday 10% more will be withheld from paychecks to cover the states $1.7 billion shortfall in the budget. They say it isn’t a tax increase, it’s just an interest free loan that we will recover in April when we file our taxes. Gee thanks guys, we all feel much better now.
The provision is one of numerous maneuvers state lawmakers and Gov. Arnold Schwarzenegger approved in the summer to paper over the state’s deficit. Many of the changes, including the extra withholding, were little noticed outside of Sacramento. ** Savvy taxpayers can get around the state’s maneuver by increasing the number of personal withholding allowances they claim on their employer tax forms, said Brenda Voet, a spokeswoman for the state’s Franchise Tax Board. ** “People can get out of this,” she said, noting that most people would have to change their allowances through their employers. California’s budget leaders are banking on the hope that most won’t. (emphasis mine)
But wait…isn’t this the same state government that continues to hire new workers and expand government even as the state’s population declines? Something is wrong with this picture…
“California: The Size of Government,” by Teresa Trujillo – Red County
…the size of California’s state government has doubled since 1990. The population hasn’t doubled. The service level of the state hasn’t significantly improved ** the state revenue increased 40% in the last 5 years. Yet, the deficit continued to grow because the legislature hasn’t met it’s fiduciary responsibilities to the public. They have refused to live within their means. ** There are 75,000 more state employees today than there were in the 1990-1991 budget year. This represents a 28% increase in the actual number of state employees. The University of California system has a 46% increase in the number of employees. ** These figures do not calculate teachers and employees of local agencies–all sectors that have swelled in the last few years.
Even as it cuts the pay for state workers?
February 27, 2009- “Furlough paychecks hit employees today”
Today the first furlough paychecks went out to state workers, and today, for many, it’s the first time that the notion of taking home nearly 10 percent less pay became real. Phone calls we’ve received from state workers reflect the range of emotion that they’re feeling. Some are angry. Others are resigned. One person started to cry. And then there are the e-mails. Some samples: ‘Jon, In case you’re curious, we’ve been getting our paychecks today and it’s not pretty. My check, as an Office Assistant (Typist), was $150 less take home than it used to be. My mother, an Assistant Information Systems Analyst, had her take home drop by $300. We will salute the governor with our Top Ramen meals for the next seventeen months.'” – Jon Ortiz – State Worker Blog, Sacramento Bee
And issues IOU’s to contractors to cover shortfalls?
“Big banks stop cashing California IOUs,” by Tami Luhby, CNNMoney.com senior writer
Californians have fewer places to redeem IOUs issued by the cash-strapped state. ** At least three major banks, Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500), stopped accepting the IOUs after Friday. ** More than 60 credit unions, however, continue to accept the paper. ** State Controller John Chiang started issuing the IOUs on July 2 to conserve cash, while lawmakers and Gov. Arnold Schwarzenegger tussle over closing a $26 billion budget gap. Friday also marked the start of a mandatory third furlough day for most state employees. ** The state, the world’s eighth largest economy, has issued more than 90,000 IOUs worth nearly $355 million. Also called registered warrants, the IOUs pay an interest rate of 3.75% and can be redeemed on Oct. 2 or earlier if divided state officials reach a budget deal. ** Recipients will include state contractors, social service agencies and those owed income tax refunds.
And keeps insisting that more money is needed for education:
“California, a Failed State,” by Alan Aronoff – American Thinker
California’s budget for K-12 education was 42.1B in 2007/2008 up from the 2002/2203 budget of $28.8B. This is an increase of 46% during the period of time that inflation as measured by the CPI grew by 12.7%. During the period from 2002 to 2005 (sorry, the CA Dept of Education has not posted K-12 statistics more recently than 2005), the California K-12 population has risen 1%. If the increased education spending were limited to inflation + increase in student population, over $8B could have been saved.
Where is that money going? Not to classrooms or sports and art programs! Money mismanagement has been the problem not lack of funds. Now the problem is exacerbated by a shrinking economy.
We all know California is broken. Our lawmakers are not only irresponsible and incompetent…they are shameless in their unwillingness to look for causes as well as solutions as they continue down the same warn path they have trod for decades. Does it occur to our lawmakers that the progressive model is flawed? Progressive tax laws have progressed to the point of being top heavy. They punish those with the resources, skills, knowledge and creativity to cause economic strength and economic strength is the foundational requirement for job growth and healthy state revenues. Yet the model favored by big government progressives remains one that inevitably overburdens the producers. Many of those producers have left or plan to leave the state, moving on to friendlier pastures. Meanwhile state sponsored programs, like education, have also grown to become top heavy with bloated bureaucratic layers of unnecessary staff sucking up education revenue that should be getting to local schools and our kids. Liberal ideas result in big government complexity that kills the dreams of all Californians…including our kids.
This citizen is tired of BIG government tricks! It’s time for a brand new model of bare bones efficiency at the top and fiscal responsibility top to bottom. Now that would be a welcome treat.