I’ve probably bored everyone with my prior posts on California and its political/financial problems, but I find those problems, and the ways in which people are reacting to them, to be fascinating. I also agree with this article that the problems are just an indicator of the challenges that other governmental entities — local, state, and federal — are going to face as tax revenues fall and spending continues to increase.
It will be interesting to see how far California lawmakers will go to balance the budget. On the revenue side, people will argue for all kinds of initiatives to bring in more money. The article, for example, argues that legalizing marijuana and unspecified other “controlled substances” would add $1 billion to California’s budgetary bottom line. (California’s reputation is such that I would expect that legalizing controlled substances would raise more than $1 billion.) I’m sure that there are similar kinds of arguments about new gambling casinos, oil drilling, and other potential revenue-producing activities that state legislators resisted when times were flush. My guess is that those possibilities are looking increasingly attractive in comparison to the alternative of actually cutting services, support for education, and so forth. Political pressures make it almost impossible to cut spending — even though it is clear that increased spending is the real cause of the budgetary problem. The article notes, for example, that current revenues would allow for more spending than was provided for in California’s budget only five years ago.