As if the depressing business of paying for the federal stimulus package weren't enough, California residents can now look forward to not even getting the share they needed to avoid paying more to the state.
The Los Angeles Times reports
that "a fresh analysis of California's flagging fiscal situation
state needs about $2 billion more than Washington is providing." That
is, if it wants to avoid "the full brunt of tax hikes and spending cuts
that lawmakers approved
last month to settle a contentious 100-day budget stalemate."
Well, at least the starving artists are getting paid! That's sure to give California's economy a boost, right? Or...at least some parts?
Actually, not even Schwarzenegger's analysts know what is happening to the budget. According to the Times, Schwarzenegger (apparently auditioning to return to his action star role as Captain Obvious) has stated that "there's mass confusion" about how much the federal money will help to save California from herself, especially considering that before now, California never had to rely on Federal Money. Schwarzenegger apparently longs for a return to those good old days when California was an economic powerhouse, calling Federal spending "icing on the cake." Because obviously, when cakes fall apart, everyone knows it's a good idea to depend on the "icing."
So what exactly is California in for now that it turns out that the other 49 states haven't been generous enough with their federal tax money? Well, for one thing, the current maximum income tax rate will rise from 9.3 to 9.55 percent, thus giving the entire population of Hollywood 0.25 percent more reason to move to another state. Not to mention all the rich people who actually produce something. But, naturally, this minor tax increase isn't what California's budgetary monitors are most concerned about. That would require them to actually care about stimulating the economy. No, what really is getting the state sovernment's goat is that they can't ease the spending cuts, specifically to "universities, courts, social services and healthcare programs."
Because obviously we don't spend enough on education, courts, "social services" or healthcare. It's not as though California's welfare state is almost European in scale already! Why, if we cut spending, we might actually be in danger of acting like the rest of the U.S.!
Joking aside, this automatic jump to the strategy of "save the spending" is precisely the reason why California is currently stuck in a budget crunch in the first place. According to blogger Tom Blumer, California accounts for 12 percent of America's workforce, and 15 percent of America's unemployed at the same time, also shown in this report by the Bureau of Labor Statistics. Moreover, as Blumer points out, "The percentage of residents on welfare in the Golden State is now more than triple that of the rest of the U.S. If it reflected the rest of the country, California would have 800,000 fewer people receiving welfare."
I'll repeat: 800,000 people. That's more people than it takes to run a small business, or even a relatively large one. This is a population which, if put back to work by a little tough love, could probably fix California's budget crisis by both creating wealth and consuming it! As opposed to the current situation, where all they do is consume other peoples' wealth and...well, keep doing so. This is a problematic situation at the best of times, and if the state weren't in crisis, this alone might well count as a crisis in itself.
So let's hope the "icing on the cake" isn't strong enough. Maybe then Schwarzenegger can finally cut off the piece of the welfare pie where these 800,000 people have all stuck their fingers.