Deficits are simple things, really. A government spends too much, brings in too little, or both. But in the case of California, there's a not-so-simple debate over whether we should pin the state's extraordinary deficit on California's spend-happy government or tax-sad citizens. The People of California vs. Sacramento (with a verdict!) after the jump:
The Case Against the People
California's direct democracy allows the public to act as its own legislature. So we get bills like Proposition 13, which capped property tax rates, strangling the government's expenses as demands for education and social services rose. This resulted, somewhat predictably, in the steady erosion of California's education standards and has exacerbated the impact of the recession because, as Paul Krugman wrote, "limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions."
Even during good years, Gov. Schwarzenegger has said tax increases are politically impossible, partly because Prop 13 also requires a two-thirds majority in both houses to pass any state tax. Combined with initiatives like Prop 98 (which forces the government to spend a certain amount on schools), the citizens of California have been trying to have it both ways -- lower taxes for better services -- for decades. On top of it all, the state is legally required to balance its budget in this deep recession, which is something like being tied in a straitjacket, chained to a bowling ball, dropped in a river and asked to run a marathon.
The Case Against the Government
California wouldn't have this problem (or at least, this big of a problem), writes John Steele Gordan from Commentary, if it hadn't increased its spending by forty percent since 2003. George Will makes the point even clearer:
"If, since 1990, state spending increases had been held to the inflation rate plus population growth, the state would have a $15 billion surplus instead of a $42 billion budget deficit, which is larger than the budgets of all but 10 states."
Stated simply, don't blame the public for putting California's government in a fiscal straitjacket. Blame California for not tying the arms tighter together.
Surely there is enough blame to go around, but it seems to me (and I'm not alone) that the real fantasy of California politics is the idea that citizens should be given such direct control over their fiscal policy. The government-citizen relationship need not be paternal, but it can still be parental. Government can still act as if it has good ideas that aren't dictated by voters. There's a wonderful quote by John F. Kennedy that goes to the heart of this issue.
I cannot believe that the people of Massachusetts sent me to Washington to serve merely as a seismograph to record the ups and downs of popular opinion. I believe instead that those of us in public office were elected - not because the people believed we would be bound by their every impulse... - but because they had confidence in our judgment...If we are to exercise fully that judgment, sometimes we may be required to lead, inform, correct and on occasion even ignore public opinion in our States.
Exactly. California needs seismographs. But not in Sacramento.