I support the recall, but I have a warning. The one thing I learned from our 2003 recall experience is that the Democrats who control the Legislature, and their allies in the press, will blame Republicans for everything that occurs post recall, even if the seeds of the destruction were sown by the Democrats prior to the recall. By the end of his term, Governor Schwarzenegger and the Republicans were successfully blamed for the failings of the state government that were rooted in the mistakes of Gray Davis. If we actually do succeed at the recall, and are not careful post recall, the same thing will happen again.
I say this because the economic collapse of the California State Government is now, in my opinion, unavoidable, and, if the recall succeeds, Democrats will do all they can to avoid responsibility for their failings, and blame the impending collapse on the new Governor. If the new Governor acts like Schwarzenegger, and, like him, lacks the fortitude to stand up to the Democrats, that new Governor will get the blame for the collapse. That is the lesson of the 2003 recall. Simply winning the recall doesn’t fix a thing. The policy disputes that will certainly follow with a Republican Governor and a Legislature controlled by Democrats will not lead to a sprint to fix California. It will be a marathon, and the public’s attention span is short. The Democrats will attempt to use that short attention span to blame the Governor and the Republicans in the Legislature for all the Democrat failures that led to the collapse, while at the same time pursuing the policies that led to the collapse in the first place. That strategy worked with Schwarzenegger, so the Democrats will try to use it again.
Which leads to the subject of this article — Everything that is wrong with the current state budget. There is a lot wrong. In this article, I will address the revenue issues, beginning with the Democrats’ contention that they have a budget surplus. There is no surplus. The damage to our economy done by the actions of our Arrogant, Lazy Authoritarian in Charge (ALAIC) Newsom in response to the COVID-19 “crisis” is deep and pervasive. The Legislative Analyst Office (LAO) said the economic damage done by the government shut down was “severe”, but not catastrophic. That is optimistic. The LAO estimates there will be a $26 billion “surplus” and emphasizes that this surplus is “one time.” The LAO makes several suggestions about how to manage that “surplus,” all of which are completely ignored by the Democrats. A look at the reports from the Budget Committees run by Democrats is a ton of self-congratulatory pronouncements about how responsible they have been, and then a spending splurge, taking this one time surplus and turning it into a long term recurring expenditures.
The first rule of responsible budgeting is “Never use non-recurring revenues on recurring expenses.” That is – don’t put one time money into program expenses that will continue to increase year after year. Government programs almost never die. The number of recipients of government largess never goes down. So the cost of these programs recurs, year after year, and always does up. The lesson of the growth in government revenues from 1995 to 2000, driven mostly by short term capital gains revenues proves this. State government kept growing and “investing” in programs, and when the money stopped with the collapse of the Silicon Valley boom, the state was stuck with record deficits.
The current “surplus” is driven mostly by the federal bail outs. It was a cute budget trick. The Federal Government can borrow money, the state cannot. So the Federal Government borrowed trillions and sent a chunk of it to California. Voila, no deficit spending by the State, and the the ALAIC and Legislature can claim that California came “roaring back.” It didn’t, but the Democrats’ lapdogs in the press dutifully reported as truth that it did, all of them in the hope that the voters won’t see the deception. The fact is the ALAIC and the Legisture hid the deception will,and when the revenues to the state from the Feds run out, as they will next year, the state will have to figure out how to cover the new spending, with diminishing money reserves.
Make no mistake, the collapse is coming. I predicted that it would occur before 2030. If things don’t change, it will be before the 2025-6 budget.