Opinion: California government inundated with money now, but a toll awaits us

The California Senate chamber. Photo by Robbie Short for CALmatters

Has any member of the California legislature inadvertently, and quite publicly, admitted that “progressive” governance is not sustainable?

While discussing state eviction protections and tenant financial assistance during a CalMatters PodcastAssembly member David Chiu, a Democrat from San Francisco, said: “If we run out of money, all bets are off. “

This is not a problem unique to a single government program, but an appropriate description of all the systems in which the redistribution of wealth is the primary objective. Margaret Thatcher best summed it up when she said in a television interview three years before being elected British Prime Minister that “Socialist governments traditionally make a financial mess. They always short of other people’s money. “

That’s not to say California has a socialist government like the ones Thatcher referred to. But it’s a “progressive” blue state, where the country’s highest income and sales taxes, and the fourth largest corporate tax, fund one of most generous social safety nets. And it’s a net that’s about to be cast wider and deeper than before.

The Legislative Assembly, unanimously in both chambers, approved the country’s first state guaranteed income plan. Sacramento has now pledged $ 35 million per month to “residents leaving the extended foster care program and those who are pregnant,” according to the Senate analysis.

California lawmakers and various activists are determined to someday socialize healthcare in the state, fund political campaigns with taxpayer dollars, and enact a wealth tax that penalizes prosperity. Meanwhile, a woefully underfunded government employee pension system threatens to drag public finances into a deep pit, dollars are poured into worsening homelessness problem, two separate stimulus payments from the state government to California residents are costing taxpayers billions of dollars, and $ 7 billion will be spent to pay the rent arrears and utility bills of those who fall behind after the closure of the economy by the “progressive” government.

Because large companies profited greatly during the pandemic – in part thanks to misguided government policies that caused many small businesses, their competitors to shut down – and increased taxable capital gains, Sacramento had a greater amount of money. other people’s money to spend on the 2021-22 budget than he ever did. Additionally, the state has raised tens of billions of funds related to Washington’s COVID.

When Gov. Gavin Newsom proposed his budget revisions in May, a writer for The Nation, a progressive magazine that claims to “speak the truth to power,” expressed enthusiasm that “California may be on the verge of get off the social democratic way taken by most Western democracies three quarters of a century ago.

Budget bills have now been passed and signed, at a record cost of $ 262 billion, and this same Nation writer has sprung from the vast spending lawmakers have planned.

“The huge influx of dollars into the general state fund,” wrote Sasha Abramsky, “coming at a time when Governor Newsom is desperate to leave his mark on the state as the recall vote draws near – led to a flowering of creative policies and programs. Their impact is likely to be felt in the decades to come. “

There’s no question about it, but most of California won’t like the way things feel.

Perhaps one day Abramsky would have to meet with a former governor of California, one Jerry Brown, whose budget response was to point out that “money does not grow on trees. “

“The state is now spending money, it is not sustainable. We need a more frugal, sustainable and prudent way of doing business, ”said Brown. “I predict that certainly within two years we are going to see fiscal stress.”

The pressure has been mounting for about two decades. From 2000 to 2019, California increased its public spending per capita by 52%, three percentage points higher than New York, which was the second among the four largest states, according to the Heritage Foundation. During the same period, per capita government spending in Texas only increased 5%. In Florida, it fell 15%.

In the case of eviction protections, lawmakers find themselves looking to end the flow of other people’s money. But rather than an exception, it is the forerunner of a future in which greedy politicians run out of other people’s money. It is not a question of if but when.

Kerry Jackson is a member of the Center for California Reform at Pacific Research Institute.

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Bernard P. Love