California Should Promptly Balance Its Budget

CaliforniaIt’s another year and California has to balance it’s budget. Isn’t that tough. I have to balance my budget every two weeks when I get my paycheck. Every household in the land does the same thing. If a family goes for too long without balancing its budget they go bankrupt, lose their house, and in some cases end up divorced.

California has a $19.9 billion budget gap to close. Governor Schwarzenegger has proposed steep reductions in almost every major government program. The Republicans favor the cuts and the Democrats want tax hikes and a $6.9 billion loan from the Federal government. And so a rerun of last year’s spectacle seems likely where week after week no agreement could be reached. Each party blaming the other, while the deficit grew larger.

Utah has around a billion dollar shortfall, maybe less, to cut from it’s budget. As a percentage it adds up to quite a reduction in tax receipts. But don’t expect to see a California style drama of many months when the Utah legislature meets. Cuts will be made, some taxes and fees will probably be increased, and life will go on. California could learn something from Utah in this instance.

As for California, both Repuplicans and Democrats are right. There should be deep cuts and tax hikes. Get on with it so the good people of California can go about their business. And forget the Federal loan. Washington has enough problems of its own. People are not going to forget come election day the wasteful bailouts and programs that Congress legislated in 2009.
Rickety signature.

Budget Shortfall Smaller in Utah

Governor Huntsman delivers the State of the State 2008.

Governor Huntsman delivers the State of the State

This morning the Deseret News was reporting that Utah’s budget shortfall was smaller than in many states. Indeed, the governor’s spokeswoman, Lisa Roskelley, said:

It’s important to understand that Utah, though in a difficult economic situation, certainly is in a better place than many other states throughout the country.

And the governor himself had this to say:

The environment is a tough one. Forty-five of 50 states are facing serious budget shortfalls.

For the 2009 fiscal year there are twelve states that have no budget shortfall. They are Alaska, Arkansas, Indiana, Louisiana, Michigan, Missouri, Montana, North Dakota, Oklahoma, Texas, West Virginia, and Wyoming. However, some of these states face a projected 2010 budget shortfall. I only list thirty-eight states with deficits so perhaps Governor Huntsman is also including projections for 2010 in his quote above. Also the reference to Arizona’s almost “25 percent budget gap” appears to be for 2010.

[Read more…]