Contributor

John Campbell

John Campbell (R-Irvine) is a California State Senator representing the 35th District in Orange County. He represents the cities of Newport Beach, Laguna Beach, Irvine, Costa Mesa, Huntington Beach, Seal Beach and Cypress. He can be reached through his Senate website and through the website for his California Senate campaign. [go to Campbell index]

Cut This: Irresponsibility
If spending were tied to population and inflation California would be in the black...
[John Campbell] 12/15/04

Have you seen the movie Groundhog Day with Bill Murray? In the film, Murray's character relives the same day over and over again, waking up each morning to the same alarm and the same music at the same time and doing the same things. Since 2000, California has been locked in a Groundhog Day of sorts relative to our state budget. Every year for five straight years, we hear about the deficit this year and how it will grow over the next few years and how persistent it has been and will be.

And 2004 is no exception. Depending on whose numbers you believe, the budget deficit this fiscal year will be from $7 billion to $10 billion, and will continue to grow over the next four years. What these numbers don't tell you is why. The "why" is not because the economy and associated state revenues are not growing. In fact, general fund revenue grew 5.2 percent last year and is projected to grow by 4.3 percent this year. This means we could raise spending by that much and not create a deficit.

The ever-continuing, ever-growing deficit is there because the Legislature has already passed laws that will increase state spending by a mind-numbing 39 percent over the next five years. Yes, you heard that right. If we do absolutely nothing, the law already calls for nearly 8 percent annual growth in state spending. That is more than the amount by which spending grew during Gov. Gray Davis' administration. That level of spending growth was unsustainable then and it is unsustainable now.

But the Davis Democrats who brought you these deficits in the first place consider that 39 percent pre-programmed growth rate as the baseline. So when you hear them say we are proposing to cut the budget and programs and services, it could mean spending is actually increasing by 38 percent. But since that is below their already-set 39 percent increase, they call it a cut.

But it's not. No one is proposing to cut the budget. The first Schwarzenegger budget last year increased overall state spending by 3.4 percent. The Deficit Prevention Act that I have proposed would allow spending to grow at the rate of the increases in population and inflation. Over the last several years, this would have amounted to 4 percent to 5 percent per year. Those are not cuts. Those are modest increases. The only thing we are proposing to cut is wild, irresponsible and unsustainable spending growth - like 39 percent over five years.

Had we only increased spending growth by population and inflation increases starting with Gov. Pete Wilson's last budget in 1998, we would enjoy a $3 billion surplus today rather than face a nearly $10 billion deficit. Even starting where we are now, if we limit growth in spending to that rate over the next four years, we will work our way out of the deficit without raising taxes or cutting anything.

So as this year's budget battle lines are drawn, here are a few salient points to remember when you evaluate the rhetoric:

1. The economy is growing, and so are state taxes and tax rates (thanks to the passing of the terrible Proposition 63). The state has more income than ever. Taxes are absolutely not too low and they are not the problem.

2. We can solve our budget problem simply by allowing spending to grow with population and inflation growth. That is not a cut.

3. When you hear the tax and spenders say "cut," they mean an increase in state spending less than 39 percent over the next five years.

4. Remember, the spenders are coming after your wallet. Don't believe them when they say they will tax someone other than you. They can't get enough money to spend at the rate they want to without taxing us all.

At the end of Groundhog Day, Bill Murray is eventually able to break the spell of living the same day over and over again, and he lives happily ever after. If we control the growth in spending, and don't raise taxes, we can do the same thing in California - and never hear about budget deficits again. CRO

This piece first appeared in the Orange County Register

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