Cutting doesn’t cut it

New taxes needed to balance state budget

Republicans in the state Legislature want to cut spending to reduce the state’s budget deficit—now at $11.2 billion this fiscal year, the result of declining revenues, and projected to be $28 billion by June 2010.

OK, let’s do it. We’ll start by shutting down higher education for two years. That would save $27 billion. No? OK, we’ll close college doors for just one year and also shut down the state prison system for a year. Oops—that would save only $24 billion.

“Wait a minute!” Republicans say. “Spending is up 33 percent in the past five years. Of course we can cut it.”

Oh yeah? Let’s see, it’s up 17 percent because of inflation and 7 percent because of population growth. That’s 24 percent. The other 9 percent went to building new prisons and to local governments, to make up for money lost when vehicle license fees were slashed.

Who wanted to build more prisons and cut the car tax? Republicans.

The Republican mantra is that all tax increases are bad and will devastate an economy that is hanging by a thread. And it’s true that an excessive tax burden is bad for the economy. But so is a state that cannot provide basic services, whose roads are crumbling and schools are inadequate.

California is going to run out of money by February. State government won’t be able to pay its bills, with disastrous consequences. That’s why Gov. Arnold Schwarzenegger has declared a fiscal emergency. Unless the Republicans want to be known solely as a party of naysayers, they need to come up with a plausible way to balance the budget. They point to their $10 billion in proposed spending cuts, but that wouldn’t come close to closing the deficit.

Last month, Democratic legislators offered a compromise package consisting of $8.1 billion in spending cuts, $8.1 billion in tax increases, and about $800 million of other solutions, such as fund shifts. If approved, it would have brought the current year nearly into balance and made significant headway toward balancing the 2009-10 budget.

The package got nowhere. Republicans, harrumphing once again about no new taxes, had just enough votes to stop it.

A new Legislature was seated Monday (Dec. 1). Maybe fresh minds can turn things around. Let’s hope so. February is just two months away.