ARTICLE: Fat Public Sector Sickens California

In this article, George Will from The Washington Post describes how California’s budget crisis results not from the state or even nation wide economic conditions, but from the severely ingrown California Legislature. However, Will proposes that the upcoming election ballot is the chance for Californians to push back and to reestablish themselves in California’s political process. This is a must-read for those planning to vote on May 19.

Fat Public Sector Sickens California

WASHINGTON – California's increasingly severe and largely self-inflicted economic crisis will deepen May 19 if, as is probable and desirable, voters reject most of the ballot measures that were drafted as part of a "solution" to the state's budget deficit.

They would make matters worse. California is driving itself into permanent stagnation. The state's perennial boast – that it is the incubator of America's future – now has an increasingly dark urgency.

Under Arnold Schwarzenegger, the best governor the states next to California have ever had, people and businesses have been relocating to those states. For four years, more Americans have moved out of California than have moved in.

California's business costs are more than 20 percent higher than the average state's. If, since 1990, state spending increases had been held to the inflation rate plus population growth, the state would have a $15 billion surplus instead of a $42 billion budget deficit, which is larger than the full budgets of all but 10 states.

Since 1990, the number of state employees has increased by more than a third. In Schwarzenegger's less than six years as governor, per capita government spending, adjusted for inflation, has increased nearly 20 percent.

Liberal orthodoxy has made the state dependent on a volatile source of revenues – high income tax rates on the wealthy. California's income and sales taxes are among the nation's highest, its business conditions among the worst, as measured by 16 variables directly influenced by the Legislature. Unemployment, the nation's fourth highest, is 11.2 percent.

Required by law to balance the budget, the Legislature has "solved" the problem by, among other things, increasing the income, sales, gas and vehicle taxes.

Proposition 1A would create a complicated – hence probably porous – spending cap and a rainy day fund. Realists, however, do not trust the Legislature to obey the law, which may be why some public employees unions cynically support 1A. Another May 19 proposition, opaquely titled the "Lottery Modernization Act," would authorize borrowing $5 billion from future hypothetical lottery receipts. The title is a measure of the political class' culture of lying.

Voters are being warned that if they reject the propositions, there might have to be $14 billion in spending cuts. (Note the $15 billion number four paragraphs above.)

Even teachers might be laid off. California teachers – the nation's highest paid, with salaries about 25 percent above the national average – are emblematic of the grip government employees unions have on the state, where 57 percent of government workers are unionized (the national average is 37 percent).

Flinching from serious budget cutting and from confronting public employees unions, some Californians focus on process questions. But what actually ails California are such centrist evasions.

The crisis has been caused by "moderation," understood as splitting the difference between hyperliberalism and extreme liberalism, a "reasonableness" that merely moderates the speed at which the ever-growing public sector suffocates the private sector.

California has become liberalism's laboratory, in which the case for fiscal conservatism is being confirmed. The state is a slow learner and hence will remain a drag on the nation's economy. But it will be a net benefit to the nation if the federal and other state governments profit from California's example, which Californians can make more vivid by voting down the propositions May 19.

Remember the story of the mule that paid attention only after being walloped by a two-by-four? The Democratic-controlled state Legislature is like that. Fortunately, it has handed voters some two-by-fours – the initiatives. Resounding rejections of them should get Sacramento's attention.

Grand Forks Herald, May 03 2009
By George Will, Washington Post