The Swarm

Mix it up with The Bee's editorial board.

May 22, 2009
On budget borrowing

I want to challenge a bit of conventional wisdom about the state's once and future habit of "borrowing" from local government or from special funds, such as those set aside for transportation.

I don't think we should call this kind of policy choice borrowing, or even think of it that way.

The state and all of its cities and counties are governed, utlimately, by the same people: us. I live in the city of Sacramento. I also live in the county, and in the state of California. I pay taxes that are collected and then disbursed to each of these entities.

If the state "borrows" $10 million from the city of Sacramento for three years, what is really happening is that state legislators are making a policy choice. They are saying, in this time of crisis, that the tax money that used to be going to the city would be better spent going for health care or prisons or education. The city council might not like this. I might not like it. But it is not as if the state is some alien creature or foreign government. It is us. And the money is ours.

In the case of the transportation fund, the misapplication of the concept of borrowing is even clearer. The transportation budget is part of state government. So in that case, the Legislature is simply saying that, in this time of crisis, they think one part of state government is more important than the other. Yes, the voters passed a measure walling off a piece of the tax collections for transportation. Then they passed another saying the Legislature could shift that money in a crisis but would have to "pay it back" within three years. So if the Legislature does this, it is really saying we think education, or whatever, is more important today than building more roads, but we think (or  hope) that in three years we'll have enough money to pay for schools and more roads, including the roads we didn't build this year.

Think of your own family. Suppose you set up a college fund for junior and started contributing 5 percent of your salary to it every year, with every intention of doing so for 18 years. Then, after 5 years, your salary was cut 10 percent. You no longer have enough money to pay your mortgage, buy your food and set money aside for college. Do you starve, move, or stop paying into the college fund? And if you stop paying into the college fund, are you being irresponsible, and are you "borrowing" from your children. I think not, on both counts.

We are so used to binding the Legislature up in fiscal knots that we have forgotten what the Legislature is actually trying to do: govern the state, set priorities, manage our tax dollars. I've been as critical of them as anyone, but maybe we ought to give them the tools to actually do their jobs before we start screaming about what a lousy job they do.












May 15, 2009
Training for life in the Capitol?
It's not just Republican governors who butt heads with the SEIU, the big public employee union. Down in San Francisco, Mayor Gavin Newsom just got handed a big setback when the union rank and file rejected an agreement he negotiated with union leaders to save $90 million in next year's budget. Now the mayor is poised to order layoffs and perhaps declare a state of emergency so he can unilaterally cut their pay. And he is refusing to support a proposed ballot measure to raise taxes in November. Even San Franciscans, he says, won't support a tax increase to pay for other peoples' raises. Interesting times. Here is an account of the latest development in the Chronicle. 
May 14, 2009
Is California a preview of America's future?

This 10-minute documentary deconstructs the history of Schwarzenegger's transformation from tax cutter to tax-raiser. It's actually surprisingly sympathetic to him, portraying the governornater more as a victim of the powerful public employee unions than a sell-out. Former legislator, now Congressman Tom McClintock plays a starring role.


May 5, 2009
NY governor proposes strict spending limit

The Democratic governor of New York has proposed a spending limit that appears to be not only stricter than California's Prop 1A but more severe even than the caps commonly promoted here by fiscal conservatives. Gov. David Patterson's proposal would limit spending growth to the average of the past three years' inflation rates -- adding nothing for population growth. But the idea appears to be going nowhere fast. Here is a New York Times story.


UPDATE: A correspondent notes that as long as New York's population is dropping, not growing, this proposal is not necessarily stricter than the approach advocated in California by fiscal conservatives. And it might even be opposed by New York Republicans who like to see state money go to their upstate districts to help keep property taxes down. All politics is local...

About The Swarm

The Swarm is written by members of The Sacramento Bee's editorial board. They meet daily and are separate from the newsroom. Views included here are those of individual writers, and do not necessarily reflect those of a majority of the board or the positions expressed in The Bee's editorials.

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