Thursday, May 21, 2009

California voters say no, no, no, no

California voters said no to a series of ballot propositions that would have helped bail the state out of what is probably the worst budget mess in the country, with the possible exception of the federal government's. Tuesday's vote leaves California officials with no easy way out of their budget crisis. The state that has exemplified a carefree lifestyle will have to face a fundamental fiscal reality: You can't spend more than you make year after year and never expect to pay the price.

States across the country are having budget problems this year (North Carolina is certainly among them), but California, because of its years of borrowing for operational experiences and excesses of irresponsible spending, is in a special category. California is facing a $21 billion deficit -- yes, billion! -- a deficit that approximates North Carolina's entire budget. But the state's voters were unimpressed. They voted down all but one measure (barring public officials' pay increases during a deficit year) aimed at whittling away at the deficit. Voters were determined to make elected officials face reality and begin the hard task of balancing expenditures to revenues.

North Carolina has a constitutional mandate to balance the budget, which means the state cannot borrow to meet operational expenses. But Tar Heel legislators have not been entirely responsible. They increased spending by double-digit percentages for years in a row while the state's economy was booming. Now that North Carolina is in even worse shape than the nation as a whole (at least as measured by unemployment), officials are trying to make huge cuts in the state's spending. But in a scenario reminiscent of California, the state employees' and teachers' unions are protesting a half-percent cut in annual salaries -- a temporary furlough meant to avoid layoffs of state personnel. Elected officials have also avoided the kind of sharp cuts that will probably be necessary (and prudent) for the state's long-term economic health. Antiquated or redundant programs are not being eliminated. The state has two separate and costly preschool programs -- Smart Start and More at Four -- with no plans to combine them or even merge budgeting. The state's costly roads system remains a political swamp, where political interests trump transportation needs.

It's been said that California in the country's experimental laboratory, and programs that begin in California slowly roll eastward from the Left Coast. If that's true, all states could wind up with the financial crisis and political stalemate California is facing now.

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