Balancing the Budget

Spending is out of control

Our budget has doubled in the last decade. Governor Schwarzenegger has already committed California to pay back billions of dollars in bonds to pay for our current wasteful spending. Now the Governor and the legislature want to put us into deeper debt with massive bonds that could bring California's bond rating to junk bond status.

For the 2006-2007 fiscal year, the Governor is proposing a budget that is 35% larger than the one that got Governor Davis recalled just three years ago. The two old parties have proven that they cannot stop their disastrous spending habits. California needs a proven tax fighter like Art Olivier to bring back fiscal responsibility to our state.

Note: The chart above is the total state budget and below is only the General Fund.

Can California run deficits forever?

No! The governor's own rosy figures show that if his budget is passed, California will run deficits of $6.4 to $9.7 billion every year for the next four years. If he is successful in recruiting 400,000 more children into the Healthy Families program and the $42.6 billion in bonds pass, the deficits will be much higher. And if the current economic expansion that has been fueled by the real estate boom quits expanding, we could have $20-$30 billion dollar deficits. Since the Governor advocates big government programs, we will most likely have massive tax increases in 2007.

Spending cuts must be made. California's employee pension system must be reformed. Workers should have a defined contribution plans opposed to the existing defined benefit plans. The University of California administrators should not get $870 million a year in perks. We should not spend $4.5 billion more on education than Prop 98 requires and the Governor should not micro-manage K-12 education. The voters must reject all of the bond proposals. With just a few common sense adjustments, we could avoid these massive, unsustainable deficits.

"All of this spending is contingent on the economic expansion continuing, and these things just don't go on forever. These expansions are cyclical. And they never seem to last longer than an ice cube on a hot sidewalk."
--Ted Gibson, former chief economist for California in reference to Schwarzenegger's 2006-07 budget.