California Democrats hoisted an alternative budget plan last Tuesday that would require few if any budget cuts. However, this is just another in a long line of increasingly desperate and risky plans by both parties to balance the budget by grabbing assumed future revenue, selling bonds based it, then hoping everything somehow works.
Or, if it doesn’t, at least maybe you won’t be in office then.
This is no way to run the most populous state in the nation, especially when it’s having crushing budget problems. Look, my politics are to the left of liberal, and this Democratic plan sounds to me more like a parody from The Onion than a serious proposal.
The plan is to raid the state soda bottle deposit fund for the next 20 years, then get an $8.7 billion loan from Wall Street which would be financed by an oil severance tax – and then swap state tax for local tax to get around the two-thirds majority rule for a budget to pass. Gosh, what could possibly go wrong with that?
I’ll bet you didn’t even know California had a soda bottle deposit fund. But to, in effect, steal that future assumed revenue to fund a deficit now is extraordinarily irresponsible. And if legislators think they will be able to float $8.7 billion of bonds from Wall Street on anything like reasonable terms given the state’s dire financial ratings, they have a rude shock in store.
That money will be expensive. Furthermore, I assume that local municipalities will fight any such plan, quite rightfully believing that Sacramento is probably up to something devious.
So, if you wonder how it ever got this crazy, it’s been a long time coming. Dan Walters in the Sacramento Bee details California’s 30 years of increasing budget problems. Here’s the timeline: