The Ring Announcer: In this corner, weighing in at 225 pounds wearing the red trucks from Never Never Land, CA, Arnold "The Govenator" Schwarzenegger and the Republicans. In the opposing corner, weighing in at several thousand pounds wearing the blue trunks from Sacramento, CA, the "We Haven't Got a Clue" Dems. Let's get readyyyyyyyyyyyyyyyyy to politicize!
The Ring Announcer: Gentleman, let's have a fair fight: no negative add campaigns, no innuendos, no spin, and no fear mongering of the public. Who am I kidding? It's non-partisan politics as usual, touch gloves and give each other hell!
The Bell Rings: May 14, 2010, Arnold Schwarzenegger announced his deficit cutting budget for "The Bubble State." The only obvious thing that we can all agree on is somewhere in the State's budget, spending needs to decrease or revenues need to increase to cure the budget. After that, the agreement goes in a million different directions. It's this lack of State unity that should make this battle in the capital an entertaining knock down drag out fight, performed by a large body of State politicians that closely resemble the 3 stooges or Little Rascals.
The Governor wants to eliminate CalWorks (the States main welfare program assisting a wide variety of low income people in the State). Elimination would save $19 billion, and eliminate aid to millions of people. It would probably make those very same people destitute to some degree. The Dems are adamant, "We will not let this happen."
The Dems want to close business tax loop holes instead, which decreases business profitability and the ability to create new jobs in a state where the unemployment rate is over 12%, and one of the highest in the nation, and given the State's population size, it might be the highest unemployment in aggregate head count. And yes, Arnold and the Republicans are dead set against raising taxes like they did last year.
And the catch 22 is neither party has the majority or super majority needed to control the outcome, so it should turn into a circus merry-go-round. Think the Tea Cups at Disneyland: spin and spin and spin, but go no where, all the while getting dizzy enough to puke. They probably won't even finalize the budget until we are well into the next fiscal year, which begins July 1, 2010, just a month away.
Both parties are probably hoping the Federal Government steps in to solve the problem in part or total with BAIL OUT money. Hey, haven't you heard? California is too big to fail. If Greece can get IMF money, which is largely supported by the US tax payer, why shouldn't the US tax payer support the same or larger financial problem here at home? That only makes sense.....in "Bizarro World." No, I'm not recommending that, but don't be surprised to hear about it. The federal Government stepped in last year with several billion for "The Bubble State" to plug holes.
In Arnold's plan, there's a call for a 10% reduction in state worker compensation. Ah, now there's an idea that needs expanding. All of my clients, who've seen their top line gross revenues decline from bubble levels, have all had to make cuts, mostly by eliminating people or reducing salaries or cutting benefits. In fact, when they've cut salaries, they lost no employees because guess what? There's no job market for anyone to find a similar job at the same pay.
The governor calls for a 10% reduction in compensation. Okay, how about a 10% salary cut, and a hard (HARD) cap on overtime and other pay to no more than 10-15% of salary. Let's get rid of these state employees who make an additional 50-200% in overtime plus other pay. I haven't even thrown in the discussion about the required roll back in retirement benefits yet.
So, why aren't we reviewing the State's issue from this angle? It's quite simple, neither the Dems nor Arnold and the Republicans have the backbone to put the gloves on and fight the very powerful unions who fund their campaigns for election and re-election.
No, no, they would rather fight each other on secondary or tertiary financial solutions, that will only be a one time solution at best, and guess what? We'll be right back in the same mess next year because this knock down drag out heavy weight bout ends in a draw of stupidity without a real solution.
The outcome means a continuation of the issue at hand. Expect to see The Bubble State with continual budget deficits each and every year for the next few years, because politicians fail to deal with the real issue, "managing payroll or going the insolvency route." On top of that, there's this belief in band-aiding the situation in the hopes of the economy recovering and curing the issue without active management. The two together ensure longevity of the issue, which means more reduced services and higher taxes/fees for citizens, and lay offs of Muni workers, none of which will solve the issue on an ongoing basis.
Hope all is well.
