Sunday, January 25, 2009

California passes the tipping point

Betsy Newmark had this interesting roundup on California's self-imposed financial crisis:

Shannon Love writes at Chicago Boyz that California has reached the point of no
return:

"Instead of state employees working for the people, the people now work for the state employees. As far as the state government is concerned, people in the private sector work merely so that they can be taxed for the benefit of the tax consumers. They’ve entered a condition not unlike like that of pre-industrial serfs.

Of course no one is being whipped, but in effect an ordinary citizen of California cannot get their desires for reduced state spending implemented due to the disproportionate power of the State’s employees and allied interest. It appears now that the government unions will not accept any solution to California’s budget crisis except increased taxes in a declining economy. Ordinary citizens have no choice but to either emigrate or just lie there and take it. "


If you're an ordinary California taxpayer, you might want to think about that emigration possibility. This is the San Diego Union Tribune editorial that prompted her conclusion that they'd passed the tipping point.

"Controller John Chiang, a Democrat who aspires to be governor, is refusing to enforce Schwarzenegger's order that state workers take two unpaid furlough days a month beginning Feb. 1 to ensure the government has enough money to continue to perform its basic functions.

Why? Chiang says it is illegal. To the contrary, established case law gives government bodies considerable leeway during emergencies. The unions challenging the furlough plan are going to need to establish that such an emergency doesn't exist. Good luck with that.

But questions about Chiang's intercession go far beyond the flimsiness of his assertion that the furlough plan is illegal. Even if it were, when did voters pass a constitutional amendment giving the controller power to veto the governor's decisions?

The answer, of course, is that they never did and never would. Voters know there can be only one governor at a time.

Considered in this context, Chiang's actions border on a bureaucratic coup d'état. It looks even more like a coup when you consider that Chiang is about to unilaterally implement his own plan to deal with the cash-flow crunch. When it was announced last week, most of the attention focused on his intention to withhold $1.9 billion in state tax refunds. More attention should have focused on Chiang's move to withhold $188 million in assistance to more than 1 million aged, blind and disabled Californians – money they rely on for food, rent and utility bills.

They are not going to be inconvenienced by Chiang's decision. Their lives will be grossly disrupted. But the controller doesn't care. He's taken care of his top priority: protecting public employees. He knows the unions always will remember this massive favor. "


Adds Betsy: "As more and more taxpayers with opportunities elsewhere move out, how will the state survive with the only ones left being just those "tax consumers?" " I think this relates also to government job growth in the face of private job shedding, which is a nationwide phenomenon, but which is grossly exaggerated in California. California is a case-in-point of what happens when you have a near democrat-hegemony. It already happens in big urban cities (Detroit, anyone?).