May 14, 2011


Little Pain, Real Gains: California’s Republicans finally offer a (short-term) budget plan. (Steven Greenhut, 13 May 2011, City Journal)

The Republican budget plan proposed on Thursday in the California Assembly wouldn’t fix the fundamental problems with the state’s budget or make long-term reforms to right this long-mismanaged state. But the plan, which Assembly Republican leader Connie Conway called “a no-tax budget blueprint,” does give the lie to Democrats’ insistence that the budget can’t be balanced without massive tax hikes. Further, it avoids borrowing gimmicks and revenue-swap schemes—typical of past budget “solutions”—and little in it would appear particularly painful, given the depth of the budget hole that has been at issue since Governor Jerry Brown’s election in November. Of course, it’s wholly unrealistic to believe that the Democratic majority will take up the minority’s plan. Instead, this was an unusually savvy political move from a Republican Party teetering on irrelevance. If legislators are serious about closing the state’s budget gap, the GOP plan shows them any number of ways to find the money without imposing higher taxes on a state that already carries one of the highest tax burdens in the country. [...]

[T]he Republican plan suggests how simple reforms can save serious dollars. Take the provision of medical care for prison inmates. According to the Assembly GOP’s budget white paper, “The cost of providing health care to state prisoners has been the fastest growing part of the corrections budget. After the [federal] receiver took control of the system in 2006, medical costs skyrocketed. They reached $2.5 billion a year, including mental health care. The cost of health care for each inmate per year in California is approximately $11,600, while prison healthcare costs $5,757 in New York; $4,720 in Florida; $4,418 in Pennsylvania; and $2,920 in Texas. While costs have increased dramatically, it has not improved the quality of care enough to take the system out of federal court receivership.” Under the Republican plan, the state would contract out the correctional health-care system, saving $400 million. But that would mean taking on the powerful California Correctional Peace Officers Association, the prison-guard union that just won an absurdly generous contract from the governor.

Other budget cuts in the Republican blueprint include $3.7 billion from programs related to early childhood, mental health, the poor, and the elderly, as well as $1.1 billion from the state payroll. The plan also includes $2.8 billion in other savings from a bill that has already passed the Assembly but hasn’t become law. It doesn’t go far enough toward addressing the size and scope of California’s government, since the state faces even bigger fiscal problems down the road. But Republicans have made their point: California can fix at least its short-term budget problem if Democrats truly want to.

The majority party, however, seems convinced that the government is too small, taxes are too low, and union members don’t have enough protections.

Posted by at May 14, 2011 7:44 AM

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