So why is California suddenly faced with a $14-billion budget shortfall? Is it because the governor (or the Legislature) did something terribly wrong?For chrissake. No wonder Davis got so much sand kicked in his face back in 2003.
No, the governor of a nation-size state like California can affect the economy, but only on its margins. The reason this deficit is looming is because no one can repeal the business cycle....Believe me, Gov. Arnold Schwarzenegger doesn't want to close 48 parks, reduce education funding or release prisoners. Like all governors, however, he is required to bring expenditures in line with revenues.
Look: I'll concede the obvious. California's last budget crisis was partly (though not entirely) the result of a Democratic legislature that refused to rein in spending and a Democratic governor who went along with it. And yes, the business cycle is responsible for a substantial drop in revenue this year, just as it was five years ago.
But absolving Schwarzenegger of blame for our latest budget crisis? Is this some kind of Stockholm Syndrome, or what? When Arnold came into office after demonizing Davis's attempt to be an adult by restoring the vehicle license fee to its 1998 level (it had been temporarily reduced thanks to good economic times during the dotcom boom), he immediately cut the VLF and then issued an enormous bond to make up the resulting shortfall. Today, the combination of the reduced VLF revenue plus payments on the bond is about $7 billion a year. Depending on whose numbers you believe, this accounts for somewhere between two-thirds and 90% of next year's projected deficit.
Are Arnold and the California GOP to blame for this? Who else? Nobody put a gun to their heads and forced them to deal with our last crisis with nothing but a toxic combination of demagoguery and tax-cut jihadism. They did it all on their own. I understand the desire to roll up our sleeves and stop sniping about the past, but let's not actively rewrite history to pretend that our latest crisis "just happened." It didn't.