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Contributors
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Tom McClintock
Mr.
McClintock is an expert on matters of the State budget and fiscal
discipline. He is a Senator in the California State Legislature
and ran for Governor in the 2003 recall election. His valuable
website is found at www.tommclintock.com [McClintock
index]
 Another
"Balanced" Budget
Remarks prior to Wednesday's Senate vote..
[Tom
McClintock] 6/20/05
We have once again been assured that this is a balanced budget.
I remember the same assurances from the same quarters last year
and the year before that. They have no credibility.
Here is what the Legislative Analyst's Office reported on Monday
regarding the state's general fund. The LAO estimates that we'll
close the current fiscal year having spent $82 billion and received
$80 billion, ending that year $2 billion in the red.
This budget, they estimate, will spend $89 billion and receive
$84 billion, ending the budget year an additional $5 billion
in the red. You're not even heading in the right direction.
Three numbers tell you a lot about this budget: 5, 6 and 9.
Five percent is the LAO's estimate of combined population and
inflation growth next year. Six percent is their estimate of
revenue growth. Once again, our revenues substantially exceed
inflation and population growth. Once again, this is not a revenue
problem.
Nine percent. That's the problem. That's the growth in state
spending in this budget. By means of comparison, the average
growth of general fund expenditures during the Davis years was
not 9 percent - it was 6 percent. So this is very much in the
tradition of the budgets that got us into this mess. In fact,
it is measurably worse than the budgets that got us into this
mess.
I would once again remind you of the First Rule
of Holes: "When
you're in one, stop digging." You folks are digging faster.
Now how is it that some Senators can even pretend the budget
balances? Because of billions of dollars of borrowed money either
carried over from last year or new borrowing contemplated in
this conference report. But I have news for you: borrowing is
not revenue. Borrowing is what happens when you're spending more
than your revenue.
It has been suggested that there is a nefarious effort to hold
the budget hostage by forces outside the legislature. What nonsense.
Once the Governor places the budget on our desks on January 10th,
it ceases to be his budget and it becomes the legislature's budget.
When the Governor took office, I warned that the same legislature
that got us into this mess was not going to get us back out again.
I thank you, my Democratic colleagues, for so effectively backing
me up on that.
One other point. These are issues that the legislature once
worked through on its own when the constitutional budget process
was honored. But by abandoning that process, the leadership has
by-passed all the debates and negotiations and give-and-take
that once produced relatively balanced and relatively on-time
budgets. The new process is to present a conference report to
the legislature for a take-it-or-leave-it vote at the 11th hour
with no opportunity for those discussions to take place.
And the result is another horribly unbalanced budget - measurably
worse than the budgets passed during the Davis years that racked
up $26 billion of deficit-related general obligation debt - all
for our children to enjoy.
So let's be clear. According to the LAO, their latest estimate
of the current year operating deficit is $2 billion. This budget
has an operating deficit of $5 billion. While population and
inflation will grow 5 percent and revenues will grow 6 percent,
spending will grow 9 percent. An AYE vote on this bill endorses
a spending plan substantially less balanced than last year's,
and growing substantially faster than it grew during the Davis
years.
Bon appetit. CRO
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