California is on the verge of an unprecedented, and perhaps disastrous, fiscal mess that nobody in Sacramento seems to be willing to address seriously:
Lawmakers have been borrowing and deferring debts for the past decade merely to close their annual deficits, and those bills will soon come due. The legislature has raided $4.3 billion from special funds and deferred $10 billion in constitutionally required payments to schools.
The state has also borrowed $10 billion from Uncle Sam to pay for jobless benefits and $313 million this year from the state disability insurance trust fund for debt service on those federal loans. Democrats have proposed replenishing the state’s barren unemployment insurance trust fund by raising payroll taxes on employers. Expect that to happen now.
Then there’s the more than $200 billion in unfunded liabilities the state has accrued for worker retirement benefits, which this year cost taxpayers $6.5 billion. The California State Teachers’ Retirement System says it needs an additional $3.5 billion and $10 billion annually for the next 30 years to amortize its debt.
The state has $73 billion in outstanding bonds for capital projects and $33 billion in voter-authorized bonds that the state hasn’t sold in part because it can’t afford higher debt payments. Unissued bonds include $9.5 billion for a bullet train, which will require $50 billion to $90 billion more to complete. Sacramento will also need more money to support an $11 billion bond to retrofit the state’s water system, which is planned for the 2014 ballot.
In this kind of environment, one would think that a competent opposition party would be able to make the case that the party in charge, which has been the Democrats for the past two decades for the most part, have failed to govern the state effectively. The problem is that the GOP isn’t exactly innocent in the collapse of California’s fiscal situation. They’ve controlled the Governorship for a large part of the past 20 years even as the Democrats dominated the legislature, and neither Pete Wilson nor Arnold Schwarzenegger did much of anything rein in the insanity that was going on in Sacramento. The same thing that's happening in the Federal government. "Until you run out of other peoples money"
Lawmakers have been borrowing and deferring debts for the past decade merely to close their annual deficits, and those bills will soon come due. The legislature has raided $4.3 billion from special funds and deferred $10 billion in constitutionally required payments to schools.
The state has also borrowed $10 billion from Uncle Sam to pay for jobless benefits and $313 million this year from the state disability insurance trust fund for debt service on those federal loans. Democrats have proposed replenishing the state’s barren unemployment insurance trust fund by raising payroll taxes on employers. Expect that to happen now.
Then there’s the more than $200 billion in unfunded liabilities the state has accrued for worker retirement benefits, which this year cost taxpayers $6.5 billion. The California State Teachers’ Retirement System says it needs an additional $3.5 billion and $10 billion annually for the next 30 years to amortize its debt.
The state has $73 billion in outstanding bonds for capital projects and $33 billion in voter-authorized bonds that the state hasn’t sold in part because it can’t afford higher debt payments. Unissued bonds include $9.5 billion for a bullet train, which will require $50 billion to $90 billion more to complete. Sacramento will also need more money to support an $11 billion bond to retrofit the state’s water system, which is planned for the 2014 ballot.
In this kind of environment, one would think that a competent opposition party would be able to make the case that the party in charge, which has been the Democrats for the past two decades for the most part, have failed to govern the state effectively. The problem is that the GOP isn’t exactly innocent in the collapse of California’s fiscal situation. They’ve controlled the Governorship for a large part of the past 20 years even as the Democrats dominated the legislature, and neither Pete Wilson nor Arnold Schwarzenegger did much of anything rein in the insanity that was going on in Sacramento. The same thing that's happening in the Federal government. "Until you run out of other peoples money"
