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For a number of years, California has maintained its reputation as a “cutting edge” state, the incubator of grandiose ideas that eventually find their way to the more “benighted” regions of the country. California is indeed ahead of the curve in that it offers a compelling look at where unfettered progressivism in all its destructive glory eventually leads. It is a destructiveness the Obama administration aims to impose on the rest of the nation should the president win re-election in 2012.
The 2010 election was essentially a repudiation of Democrats and the Obama administration in virtually every state across the nation–save California. While 63 seats in the House of Representatives changed hands from Democrats to Republicans, not even one Democrat incumbent from California lost a seat. Democrat Jerry Brown was elected Governor and Sen. Barbara Boxer was re-elected to the Senate. Leftists were ecstatic. “California held on last night against the Republican rager that swept the nation,” wrote Mother Jones’ Josh Harkinson. Huffington Post’s Phil Trounstine and Jerry Roberts noted that the “raging red wave that swept across the country” didn’t reach the Golden State.
Jennifer Jones was far less optimistic–and far more accurate. “California seems determined to pursue liberal statism to its logical conclusion (bankruptcy),” she wrote for Commentary Magazine.
Technically speaking states cannot go bankrupt. But they can run out of money, precisely like California is–again. In 2009, facing a staggering budget shortfall of $26 billion, the state was forced to issue IOUs to many of its creditors and furlough state employees. Last month, CA state Controller John Chiang notified the legislature that the state will run out of money sometime in March, unless $3 billion in cuts or revenues can be found to keep the state solvent for fiscal year that ends in June. Next year looks even worse, with the state facing a deficit of $6.6 billion.
Cities are a different story. They can go bankrupt, and Stockton, CA is on the brink. Mayor Ann Johnston expresses the essence of progressive “logic” that brought this city of nearly 300,00 people to its knees. “When we went on a real spending spree and built the arena, the ballpark, a lot of community infrastructure–did a whole lot of things to improve the community that were bonded,” she says. “I mean, these were all financed through municipal bonds.” That would be $300 million worth of bonds fueled by a real estate boom “city leaders thought…was going to continue forever,” Johnston added.
As for public service employees, Stockton is a microcosm. Pay raises and enhanced benefit packages for police and firemen became the order of the day. City Manager Bob Deis says Stockton is currently facing a $20 million deficit in a $160 million budget. Yet those numbers pale in comparison to the far bigger problem “Right now, we have an unfunded liability in the retiree health program around $450 million,” said Deis. Stockton would be the largest city in America to go bankrupt. Yet they are not alone. The northern California cities of Hercules and Lincoln, are attempting to restructure their debt and cut employee costs to forestall insolvency, and municipal finances in San Jose and San Diego are also reaching unsustainable levels, driven by the same public employee pension debt and healthcare costs strangling municipalities across the entire state.
Yet progressive arrogance and denial run deep. Even modest pension reforms proposed by Gov. Brown are going nowhere in the Democratically-dominated state legislature, and Democratic Sacramento Assemblyman Roger Dickinson has actually introduced a Public Employees Bill of Rights protecting the status quo of union largess. How tough it is for public employees? 15,000 California government retirees have pensions greater than $100,000 per year, and 1332 public sector employees currently make over $150,000 per year. And lest anyone think Gov. Jerry Brown is the voice of reason, think again: he and his fellow Democrats in the state legislature continue to support a high-speed rail project connecting Los Angeles and San Francisco whose cost estimates have exploded from between $40-$45 billion two years ago to $98.5-$117.6 billion–before the first piece of track has been laid down.
California’s solutions? Like all good progressives, Brown has proposed “tax the rich” increases in California’s seven income tax brackets that currently begin at 9.3 percent for people making $47,056 a year, up to 10.3 percent for people with incomes over a million dollars. Brown wants to raise the latter figure to 12.3 percent on everyone making $250,000 or more. The governor insists on these increases even though the top one percent of California earners currently pay 50 percent of the state’s income tax. He also wants to raise state sales taxes (which vary by county) up to a range of 7.75 percent to 10 percent. All of these proposals will be on the 2012 ballot.
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