State budget proposal full of bad ideas

Many Californians probably missed Gov. Arnold Schwarzenegger's proposed budget for the coming year. In a sense he missed it too, having left town for an Idaho family vacation, leaving aides behind in Sacramento to unveil his 2009-2010 tax-and-spend plan on New Year's Eve.

It's understandable the governor might not want to stand too close to this latest unlikely pitch, which has little chance of adoption and less chance of fixing California's looming $40 billion deficit.

Gov. Schwarzenegger's budget would increase taxes even more than he's already proposed, and rely on borrowing even more than the state already does. He would increase families' taxes by reducing income tax dependent credits to $103 from $309. He also wants to take out a $4.7 billion “bridge loan” that would saddle taxpayers with steep interest charges. Taxpayers' burdens and over borrowing to increase that burden have been main components of the state's irresponsible fiscal approach.

While the governor's latest proposal would worsen tax and debt burdens, it does take a stab at the heart of the fiscal malady, the propensity to spend too much on things the government shouldn't be doing. We applaud Gov. Schwarzenegger for partly resurrecting his proposal, which we endorsed in 2004, to “blow up the boxes” of government.

The current incarnation is a scaled-down version of the original task force proposal that would have eliminated 12,000 state jobs and hundreds of appointed positions to save $32 billion. That effort almost entirely failed after the Legislative Analyst Office said it would save less than half the projected amount and legislators, vested interests and state employee unions rose in opposition.

The latest version includes 17 proposals to consolidate and combine regulatory boards and bureaus. The governor's spokesmen say this is, “an opportunity for state government to increase efficiency, spend less and eliminate duplication and functions that are not absolutely critical.”

Meanwhile, the state is on track to run out of cash to pay bills by Feb. 1, because, as the Los Angeles Times reported, “investors will not issue short-term loans, fearing the state's finances are in such disarray that they might not get their money back.” If lenders, who stand to profit, are leery of lending, why should already over-burdened taxpayers pay more than they already do?