A week ago, California has a $68 billion deficit—going on to $80 billion. Yet, the Hollywood Slicky was able to creatively turn it into a $37.8 billion deficit. How did he do that? Easy, manipulated the books.
First he took $13 billion from the reserves. Then he deferred over $10 billion in needed repairs and infrastructure. At that point is cut more than $2 billion from forest management—assuring more intense and wider forest fires.
Them thought revenues are heading down, he proclaimed they will increase!!
At the end, King Kong died. Is Newsom a murderer or is this assisted suicide, for California?
King Kong returns By Richard Eber
Richard Eber, Exclusive to the California Political News and Views, 1/15/24 www.capoliticalnewsandviews.com
As he precariously hung from the tower of the Empire State Building, I believed as a 10-year-old, King Kong’s life could have been saved if only those Jet Fighters had been grounded.
While such logic might be sound, reality did not coincide with the truth. This gentle giant we grew to love, was a victim of greed, hate, and ignorance that could not be overcome at any price.
2024 California has their own version of King Kong playing out. It’s called the 68-billion-dollar budget deficit. In 12 short months the State has gone from a 90-billion surplus to a perilous predicament. Governor Gavin Newsom has failed to grasp why the State’s economy has transitioned from the Penthouse to the Outhouse.
Might he consider what has really been the cause for this sudden change? How can the powers that be in Sacramento remedy this drastic turn of events? Is there anyone around that can provide solutions other than applying fiscal band aids to California’s declining fortunes?
The first question to be asked is how could such a huge surplus vaporize in only one year? As 2022 approached, the Golden State was the recipient of unspent Covid Funds, higher than anticipated tax revenues, and low interest rates on services that required short term borrowing.
Governor Newsom and his progressive team decided to use surplus funds for K1-12 schools, medical care for illegal aliens, pork barrel mass transit projects, Homeless services, Housing, and infrastructure expenditures. When revenue declined, there was no real plan to cut back spending.
The Governor is borrowed against the State’s reserve funds and put off capital expenditures for a year to consume most of the budget deficit. In doing so Newsom has failed to take into account: businesses along with wealthy taxpayers fleeing the State by the thousands. Added to this has been decreasing revenues emanating from high tech and the entertainment sector in Hollywood.
Newsom’s assumption is that as tax revenues increase, interest rates will fall, and CalPERS return on stock market investments can be counted on to improve. What he doesn’t realize is his Leap of Faith rebound projections are overoptimistic.
Unfortunately, in a one-party State such as California dominated by Democrats, missing is a checks and balance system to reign in Progressives. Republicans, holding less than one third of the seats in the Legislature, lack the numbers, and fortitude to provide an alternative to reckless Democratic overspending.
They follow Aesop’s Fable tale of the Grasshopper and the Ant. It assumes we be able to navigate thru tough times in 2024 looking forward to sunny days ahead. They have no viable plans for what lies ahead in 2025-6. If revenue remains stagnant or falls, no quick fixes appear to be on the horizon.
There is even talk in the Legislature of imposing a new wealth tax for the richest 1% that would be generated by their total assets including business conducted outside the State.
This harebrained scheme is so absurd, even Gavin Newsom opposes it. He knows if the new tax were imposed, the trail of U-Hauls destined for Nevada, Arizona, Texas, Florida, and beyond would be lengthier than Mao’s Long March.
Understanding that California’s current budget needs to be trimmed, it is time to explore a strong dose of reality. Among areas to be considered include:
· Stop increasing school funding for K1-12 grades that take up 25% of the State budget. Why should taxpayers continue to pour more money into a system that has harvested some of the lowest math and English scores in the county? It is a point of information; the Teachers Union is one of the Governor’s biggest supporters. Should this allow them to resist reform to give children literacy tools needed to survive in the future?
· At least delay the State Government’s ill-conceived climate change laws that are crippling businesses and increasing energy costs to among the highest in the USA. They create more inflation than California’s shrinking middle class and growing poor can endure. The idea of only selling electric cars in the State by 2035 is total stupidity. It should be realized California might have the 5th largest economy in the world; but lacks Constitutional authority to impose its will on the other 50 States.
· Much like immigration policy being needed to be changed to the system in place under President Trump, judicial reform should follow. Less than five years ago, bail was readily imposed, dangerous felons went to prison, D.A.’s were more interested in prosecuting wrongdoers, and police forces were given the needed authority to carry out their duties.
· Rather than legislating subsidies to spur needed residential construction, perhaps the Legislature should consider rolling back unnecessary bureaucracy, regulations, permits, Project Labor Agreements (PLA), and taxes that impede developers. It might be time to return the days when local communities could generate sufficient housing starts without interference from Sacramento.
· Stop spending billions of dollars on medical care and government services for illegal aliens. Present policies encourage immigrant families to migrate to California. Why should they be at the front of the line to receive taxpayer dollars while at the same time contributing to unneeded fiscal deficits?
It should be noted that the present band aid approach to curing California’s fiscal maladies does not work. Gavin Newsom and his Socialist followers have already killed the Golden Goose of economic opportunity.
Mayor change needs to be made. State Government is simply too large and inefficient. Even grounding the jet fighters that led to King Kong’s demise are no longer in play.
California does seem past the point where it could be saved from economic and social disaster “if we only….” Maybe it needs to reach rock bottom, with at least 40% drop in population, and zero bailout.