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Ray Haynes

A Screw up of Monumental Proportions

The Legislature is required to adopt the budget by June 15, according to the Constitution. With that deadline quickly approaching, one would think that the press would be doing a countdown, telling us what is going on in Sacramento and telling us all about the meetings and proposals about the budget. It should be a daily update. Except it is not. Why not? Because the Democrats, who run everything in Sacramento screwed up the last three or four budgets, and the chickens are coming home to roost. They are trying to figure out how to solve the problem without cutting their pet programs or raising taxes in an election year. Their past actions have created this screw up of monumental proportions and the entire Sacramento power structure and their sycophants in the media are doing their best to hide the size of the problem or the depth of their incompetence that led to this situation.

Up to this point, behind closed doors, they have tried to blame the federal government for delaying the filing of tax returns in 2023 and unpredictable fluctuations in revenue receipts in the last three years, but the fact is the legislature and the governor’s office have been playing fast and loose with the budget numbers for political reasons, and now they have a problem that is exploding, and they don’t know what to do.

First, let’s start with the first big screw up, Proposition 98. We all know that one of the most powerful lobbying organizations in Sacramento is the teacher’s union, which sees its only function as one to ensure the flow of tax dollars into the government run education system. Their first move to make sure that their snouts are firmly stuck in the government tax dollar trough was the adoption of Proposition 98, which ensures that the schools get an increasing level of funding every year. It doesn’t matter whether they are actually teaching kids anything, or efficiently and effectively spending the money the system receives, it only matters that the dollars increase every year. Prop. 98 requires that the schools receive either forty percent of the general fund revenue or whatever they got last year plus inflation and school population increases. These calculations are called Test 1 and Test 2, and create a constitutionally created ever increasing share of the budget for education, regardless of other programs. If for some reason revenue at the state level drops, the schools fall into what they call a Test 3 situation, which basically says: (1) the state figures out what the schools are owed under Test 2; (3) how much the state can actually pay and still have a balanced budget; and (3) if the state can’t pay under Test 2, the difference between what the state can pay and the Test 2 shortfall becomes a debt the state owes to the schools in future budget years, once again regardless of whether the schools are doing the job of educating the students they are being paid to educate. No oversight, no accountability, just an endless flow of your money to the school bureaucrats.

So how is this affecting this year’s budget? It’s simple, the amount going to the schools is based on the constitutionally required revenue estimates made each January and May as the budget is being debated and ultimately adopted. The monumental screw up occurred in the last three years. For political reasons, the revenue estimates generated by the Department of Finance and Legislative Analyst Office have significantly overestimated revenue in the budgets, which means that the Prop. 98 payments to schools were way too high. Based on the language of Prop. 98 however it doesn’t matter that the schools were overpaid in any one year, they get to keep the money and then get more the next year, regardless of how bad the revenue estimates in those budget year was. There is no provision for revising down the Prop. 98 base. Revenue falls short? Too bad. You still have to pay more the next year.

Do this over three years, as the Governor and the Legislature has done, and the hole that has been dug by this consistent overestimation of revenue becomes too big to handle. That is where we are today, and that is the big secret in Sacramento. They have been playing fast and loose with the budget to pay off their political allies with your money, and they don’t want you to know how badly they screwed up. They are hoping it will be secret until past the election, and they keep their two-thirds majority in the Legislature, so that they can raise taxes to cover up the screw up.

There are really only two things that government does. First, it is supposed to protect us from the evil people in society who wish to do us physical harm, that is, the criminals who rob and steal from, and/or assault and kill the innocents in society. The second is to honestly and wisely manage the resources it extracts from us through taxes. The Democrats who run Sacramento have failed on both of their essential functions. They control everything there, they have no one else to blame. All they can do is keep it secret, and, if the media had any kind of conscience, they would not allow them to do. The media doesn’t, so the screw ups in Sacramento remain secret, and will do so until the election comes, and the budget analysis in November comes out and exposes the depth of the problem. Then we will be told we have to pay more taxes to resolve it, and two years will pass before the tax increasers can be held to account.

We get the government we deserve. There is a reason why productive citizens are leaving this state, and we are getting stuck with leaches and locusts haunting the halls of the State Capitol. That reason is because a majority of our citizens keep voting for them. It will get a lot worse before it gets better.