California Tax Revenues Lag

In what is, for me, the biggest non-surprise, California looks to be facing a $9 billion deficit. Reports are that income tax collections in April have severely lagged behind estimates. Given that the economy remains in the doldrums, only bureaucrats and Democrats in Sacramento should be surprised by the news.

Actually, Governor Jerry Brown has called upon Democrats in the legislature to approve cuts. The problem, though, is that they are beholden to special interest groups (mainly public employee unions) which would be directly impacted by those cuts. Sooner or later those cuts will have to be made, and they’ll be a lot less painful if they’re made sooner. Unfortunately, I expect later to win rather than sooner.

Meanwhile, Governor Brown’s proposed tax increase this fall would increase the amount of money to education. If the measure passes, that is; under California’s constitution, 40% of taxes go to education. So will schools see any of those funds? No, they’d all go to pensions. As more Californians find out about this expect the measure to flunk in November.

I’ve been saying for years the solution is that government must be small and nimble. I’ve written in the past about California’s plethora of government agencies. The size of government must shrink drastically for fiscal sanity to again exist in the Bronze Golden State.

Comments are closed.