Categorized | Politics, State

The Red Ink And Herrings Of Governor Brown’s Budget

Governor’s Tax Hikes and State Excesses Won’t Erase ‘Wall of Debt’

 

Skippy Massey
Humboldt Sentinel

 

The Governor means business by enacting his tough set of fiscal reforms.  He’s broken Sacramento’s legislative partisan gridlock and delivered the budget on time.  But the ink is still dripping– and curbing Mr. Toad’s Wild Ride is going to be a tough sell.

The compromise tax hike initiative supported by Governor Jerry Brown won’t raise enough revenue to eliminate California’s whopping $34 billion “wall of debt” in four years, according to a report from the state Department of Finance, the Sacramento Bee reported Monday.

The Bee’s report doesn’t paint a pretty picture for the Golden State.

The Sentinel has been following the State budget and the Governor’s attempts at reigning an out of bounds roller coaster ride back into fiscal balance.

 

Red Ink: Details of the ‘Wall of Debt’

Last year, Brown introduced the ‘wall of debt’ concept to illustrate various forms of borrowing by the state over the past few years.  Think of it as the opposite of Winco’s ‘wall of values.’  It’s bad, very bad, and it ain’t no bargain like two boxes of Kraft Mac ‘n Cheese for a buck.

According to the Department of Finance report, the wall of debt currently is at $34.2 billion and would drop to $8.9 billion by the end of fiscal year 2015-2016– that is, if voters pass the compromise tax hike plan in November.  The projection falls short of Brown’s goal to eliminate budget-based borrowing in four years with the approval of the tax hike, the Bee said. 

California’s borrowing from special fund accounts has already reached nearly $4.3 billion, more than five times the amount from June 2008.

 Details of the Compromise Tax Hike Plan

The compromise tax hike plan — developed by Brown and supporters of the “Millionaires Tax” to help balance the budget – would:

  • Increase the personal income tax by one percentage point for individuals who earn $250,000 annually or couples who earn $500,000 annually; and by two percentage points for individuals who earn $300,000 annually or couples who earn $600,000 annually.
  • Extend the income tax increases on wealthy residents from five to seven years.
  • Increase the sales tax by a quarter of a cent.  The sales tax hike would expire in four years.

The combination of taxes would raise an estimated $9 billion over the next fiscal year.

Last month, Brown signed the fiscal year 2012-2013 budget agreement, which factors in presumed revenue coming from the compromise tax hike plan.

 More Red Ink

We still have the Governor’s multi-billion-dollar building proposals for a high speed bullet train ($4.7 billion) and the massive twin water tunnels ($14.7 billion) for the southern portion of the state to contend with.  Together, those two projects will cost nearly $20 billion—and that’s just for starters.

The good news, perhaps to many, is that the Governor has promised he’ll apply a tight tourniquet to the ever-widening costs of public pensions with his serious reforms next year, cutting some of the flow of the State’s hemorrhaging red ink.

 Red Herrings

Bruce Anderson of the Anderson Valley Advertiser brought us the following gem regarding the State Parks fiasco the Sentinel reported on last week. 

You remember the scandalous story:  $54 million dollars was ‘found’ in two hidden funds, causing longtime State Parks Director Ruth Coleman to resign and her chief deputy, Michael Harris, to be fired after the missing money was discovered.

Mr. Anderson noted:

“Manuel Lopez, former deputy director of administrative services for the Department of Parks and Recreation, told the Sacramento Bee that he informed agency Director Ruth Coleman about a $20 million surplus in the Parks and Recreation Fund ‘at least five times over approximately a five-year span.’

“Nonprofit groups and local governments helped raise money and assumed responsibility to keep the 70 state parks open past a July 1 closure deadline.  The attorney general and state finance officials are investigating the scandal.  State lawmakers also are promising oversight hearings and plan to seek an independent audit of the department.  The state Finance Department also is reviewing all the state’s 560 special funds to make sure the actual fund balances match what has been reported to the administration and the state controller.

“State officials said Friday that the department had maintained the unreported money in its accounts for at least 12 years, including the entire time Coleman was director.  She served under three governors but said in her resignation that she was ‘personally appalled’ to learn of the hidden money.”

Right.  Got that.  But hang on, folks.  Our favorite Mendocino Muckraker torments us with yet another one of his irksome pearls here:

NOW IT’S $37 BILLION?  As California State government tries to explain how State Parks misplaced millions, we now learn that the State has no way of accounting for $37 billion in “special funds” squirreled away in some 500 accounts, relying, they say, on an “honor system” to keep track of the money.

No one checks to see that the money reported as being in these accounts actually matches the money on hand.  Only last week it was revealed that State Parks had sequestered $54 million in two special-fund accounts by not reporting them over the last 12 years.

 The Governor’s take on all this hoopla?  Last week he downplayed the scandal, saying it was the first time he’s seen the government get in trouble “for saving money.”

“When somebody comes and says, ‘Hey, guess what, we have some money over here,’ that’s better than saying, ‘Whoops, we don’t have the money,’ Governor Brown said.  “More money is better than less money,” the Governor quipped at a news conference.

Right.  And please let us know when pigs can fly through the smoke and mirrors.

* * * * * * * *
Red ink and red herrings and billion-dollar projects.  We don’t know whether we’re coming or going in terms of revenue.  Money’s flying out the door.  Can it possibly get any worse—or better—for the Golden State?

If we didn’t have California as a case study of fiscal insanity, someone would have to invent it.

One Response to “The Red Ink And Herrings Of Governor Brown’s Budget”

  1. Charles Bean says:

    I was reading an article the other day, which spoke of a $50 billion debt owed to the State pension fund. It explained this was what the additional tax would pay, not as advertised. Just a bunch shell games with different pots of money, and though the State has got away with it, it will catch up with them.

Trackbacks/Pingbacks


Leave a Reply

HumSentinel on Twitter

RSS Progressive Review

  • Furthermore. . .
    Vox - Google is escalating its fight with conventional broadband internet providers, announcing plans this week to expand its super-fast internet service to four new metropolitan areas in the American South. The Atlanta, Nashville, Charlotte, and Raleigh-Durham metro areas will soon join Kansas City, Austin, and Provo, Utah, in Google's high-speed inter […]
  • Dartmouth to enforce on campus hard liquor prohibition
    Gawker - In a speech at Dartmouth's campus , the college's president, Philip J. Hanlon, announced that there will be a campus-wide ban on hard liquor from March 30 onward. The New York Times reports that this decision is in response to a "spate of student misbehavior that has tarnished the reputation" of the school.Hanlon's speech re […]
  • Muslim murder rate lower than non-Muslim worrld
    M.Stanley Fish, Washington Post -  Predominantly, Muslim countries average 2.4 murders per annum per 100,000 people, compared to 7.5 in non-Muslim countries. The percentage of the society that is made up of Muslims is an extraordinarily good predictor of a country's murder rate. More authoritarianism in Muslim countries does not account for the differen […]
  • Morning Line
    With Romney out, Bush leads narrowly in our three poll moving average over Carson and Huckbee. They are the only Republicans in double digits. Huckabee leads in southern states such as AK, MD, NC, SC. Rand Paul leads in CO. Christie leads in NJ, NY. Walker leads in WI […]
  • Some media avoid propaganda words like 'terrorist" and "extremist"
    T. Becket Adams, Washington Examiner -  Al Jazeera English isn’t the only news group to avoid certain key words and phrases, including "terrorist" and "militants," when it reports on terrorist events — the Qatar-based news agency is joined by the likes of Reuters, the BBC and the Associated Press.“There is no BBC ban on the word ‘terroris […]
  • Americans support climate change action
    Washington Examiner - 78 percent of Americans backed federal action to limit emissions from businesses, including 60 percent of Republicans […]
  • Well, there go the laughs
    NY Times - Mitt Romney said Friday that he would not seek the Republican nomination for president in 2016.Mr. Romney, the former Massachusetts governor, shared his decision on a conference call with a small group of advisers.In a second call to a larger group of supporters, Mr. Romney said, “After putting considerable thought into making another run for pres […]
  • Government privacy boad tells Obama to stop NSA mass spying
    Guardian - The US government’s privacy board is calling out President Barack Obama for continuing to collect Americans’ phone data in bulk, a year after it urged an end to the controversial National Security Agency program.The Obama administration could cease the mass acquisition of US phone records “at any time”, the Privacy and Civil Liberties Oversight Bo […]
  • A different cop story
    Al Kamen and Colby Itkowitz, Washington Post- There’s one issue, perhaps the only one, that Republicans and Democrats seem to agree on: reducing the population of the nation’s crowded and expensive prisons, partly through reducing sentences for low-level and nonviolent offenders. One person who would be expected to be at the table for high-level strategizing […]
  • Economy links
    NEWS The real economy Corporate America Housing & foreclosures Labor news Social Security Trans Pacific Partnership Wall Street news ESSAYS Some ways to occupy our future...and our economy Born again economics Short history of the economic American True cost of Reagan and extreme capitalism The other way to deal with the national debt The savings & l […]
  • Word
    Music washes away the dust of every day life - Art Blakey […]
  • The 9 Senate Democrats who voted for the Keystone pipeline
    National Journal1. Michael Bennet, Colo.2. Thomas Carper, Del.3. Robert Casey, Pa.4. Joe Donnelly, Ind.5. Heidi Heitkamp, N.D.6. Joe Manchin, W. Va.7. Claire McCaskill, Mo.8. Jon Tester, Mont.9. Mark Warner, Va. […]
  • NYPD to treat protestors like terrorists
    Vox - New York Police Commissioner Bill Bratton unveiled a new militarized police unit that will be trained and armed with heavy protective gear, long rifles, and machine guns to restrain terrorists and social justice protesters.Bratton explained the purpose of the unit, which will consist of 350 officers, to CBS New York:It is designed for dealing with even […]
  • About Michelle Obama's lack of headscarve in Saudi Arabia
    VoxAmerican officials in Saudi Arabia typically do not wear headscarves, including at formal government functions. Michelle was following normal protocol.Former first ladies Laura Bush and Hillary Clinton did not wear headscarves on similar official visits to Saudi Arabia. Neither did former Secretary of State Condoleezza Rice.Saudi Arabia is officially ultr […]
  • And now some true words about the war on terror from a former FBI official
    If you’re submitting budget proposals for a law enforcement agency, for an intelligence agency, you’re not going to submit the proposal that ‘We won the war on terror and everything’s great,’ cuz the first thing that’s gonna happen is your budget’s gonna be cut in half. You know, it’s my opposite of Jesse Jackson’s ‘Keep Hope Alive’—it’s ‘Keep Fear Alive.’ K […]