You know that. I know that. Does our leadership here in the Bronze Golden State know that?
Last week I got the chance to read. I was forced to—I was in bed with the flu. A very small blurb in the Register caught my eye: “State $1 Billion Behind in Collections in January.” California, for unknown reasons, collected $1 billion less in tax revenues than projected in January. Bureaucrats said not to worry; we think it’s a glitch and we’ll catch up soon.
I have my doubts.
Back in January I wrote about two stories. The first story is based on a Dan Walters column in the Sacramento Bee and examines the possibility that a single taxpayer led to a large increase in tax revenue collections in 2006. The second story examines the likely impact of the recent freeze.
I don’t think it takes a brain surgeon to see where we’re going. The talk out of Sacramento is all about new spending programs, new health insurance programs, etc. What they really should be talking about is cutting the current programs, because there isn’t going to be money to pay for everything on the Legislature’s wish list. Come May or June, when the impact of the collections from the 2006 tax season rolls in, this may become clear. This will be very clear in the fall, when estimated payments are collected at levels that will be much lower than the state anticipates.
Of course, one option is a tax increase. However, it takes a 2/3 vote of the Legislature for that to happen, and the Republicans have enough votes to block that.
California still has a structural deficit. I’m betting it’s going to be a lot worse at the end of 2007 than it is today.