We’re now 25 billion dollars in the red in California.  The governor along with his Democrat controlled legislature will never do the right thing. They’re the same folks who brought you this mess.  When Governor Brown was previously the governor he signed the Dills Act in 1978 that gave civil servants the right to collective bargaining.  He did this on his very first day in office as governor.  This revolutionary enactment was the beginning of the end or our state. Now, with the power of government labor unions unchecked, state employees, now the largest unionized force of any state, have controlled the legislative agenda for the past 30 years.  Their sweetheart pension plans are a marvel to their political strength and are unmatched anywhere in the private sector.  This is why although state workers’ pensions are the single largest problem in this budget crisis, Brown has not even mentioned it in his new “reform” proposals.   He has however mentioned tax increases, or as he calls them tax “extensions”. A two-thirds margin of Californians overwhelmingly opposes tax increases as a solution.

Here’s the problem, notwithstanding a current state budget deficit of 25 billion dollars, the state has 700 billion dollars in unfunded pension liabilities.   This is ticking time bomb. No matter how much we cut and balance today’s budget, we will never catch up and meet the needs of the ridiculously high unfunded pensions.  This is the problem.   Brown’s budget may take away state workers’ cell phones and some social services dollars, but seriously, big deal.  This is just more smoke and mirrors. It just kicks the can down the road. This will not solve our major structural problem.

Legalizing online poker, taxing marijuana (both proposed) and taxing air (already passed through cap and trade) will not solve the budget problems.  The latter is a way of taxing the few manufacturing industries still dumb enough to be creating jobs in California.  If they hadn’t got the memo earlier, this bill should be a neon sign. Get out of Dodge.  We don’t see many folks clamoring for yet cleaner air, but we see millions looking for work.

Our legislature has been hallucinating for decades. They didn’t see the current budget crisis coming?

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California leaders including Gov. Arnold Schwarzenegger have reportedly agreed a new budget deal, but as the state attracts jeers for its lateness in taking concrete steps to pass a budget, some are booing its leaders for their willingness to sign off on tax hikes when it is being reported that California is owed about $1.4 billion in tax revenue already collected by businesses from consumers, but never remitted to the state.

The LA Times reports:

California is owed nearly $1.4 billion by auto dealers, restaurants and other businesses that collected sales taxes from buyers but didn’t pass the money along to the state — a situation that is aggravating California’s budget crisis.

The tab is up about 25% from a year ago and has almost doubled since 2007, state records show.

That money could make a significant dent in the state’s $19-billion budget gap. Watchdog groups say the state’s failure to collect it is particularly galling because much of the tax money has already been paid by consumers — it just hasn’t been turned over by merchants to the state Board of Equalization.

“All of us want people to pay the tax they legally owe before lawmakers go looking to raise taxes,” said Jean Ross, executive director of the California Budget Project, a Sacramento nonprofit that advocates for lower-income Californians.

Indeed, reports indicate that Republicans in the Golden State have reluctantly signed off on one tax increase as a possible pathway to getting more tax cuts included in any budget.  According to the Sacramento Bee, as of last week, GOP leadership had agreed to a delay in implementation of a net operating loss (“NOL”) deduction originally intended to begin this year until 2012– a move that would supposedly bring in about $1.4 billion.

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Pollsters and pundits alike most often concentrate on the marquee political races.  The Florida Senate race garners national attention because of its intrigue and its national implications.  In California, there is a battle for Governor that will decide the direction of the Golden State.  Just below that surface, however, is a key race that could prove every bit as momentous and which may be key to the future of regaining our limited government heritage – the race for California State Controller.

At first blush, it is a race between a big government, union-supporting incumbent – Democrat John Chiang – and a conservative, limited government reformer, State Senator Tony Strickland.  While there are many races that may fit that description, the Controller’s office is not just another political office.

Keep in mind that despite intervals between Republican and Democrat Presidents, Republican and Democrat Governors, Republican and Democrat Legislatures and Congresses, the size of the federal and state governments has exploded since the 1960’s.  The quaint, 1960s, pre-Great Society, federal budgets of $130 billion have given way to a $4 trillion dollar monolith.  Many state budgets, including California’s have seen similar growth.

That explosive growth, under the watchful eyes of both parties, occurs because more often than not, political discourse is a simple matter of what can government do and how can we fund it.  Far less often do meaningful discussions occur about making government accountable for the money it already has.  If limited government is to make a comeback, the latter must take precedence over the former and (1) today’s environment is the time to do it and (2) the California Controller’s race is the election on which to make that stand.

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