Governor Schwarzenegger of California on Wednesday ordered furloughs for 156,000 of the state’s 237,000 employees. The estimated savings from these furloughs is $150,000,000 per month — only $80,000,000 of which comes from savings in general revenue — a drop in the bucket compared to the overall state deficit which stands at $19,000,000,000.

If the furloughs were permanent, the annual savings to the State of California would be $1,200,000,000, which means that it would take over 15 years of furloughs to close the state budget deficit. The furloughs will begin in August, but an earlier state furlough just ended in June. Schwarzenegger has offered, during the budget impasse, to pay state employees the federal minimum wage, but that offered has been rejected by Democrats in the State Assembly and state employee union leaders. 

The Governor has also hinted that he will not sign a state budget at all unless the legislature enacts pension, spending, and tax reforms. John Chiang, the State Controller of California, has indicated that in the next couple of months his office will start issuing IOUs if the budget crisis continues, and Chaing also notes that the state will run out of cash in October. Democrats in the State Assembly have blamed Schwarzenegger for the crisis, and have vowed to protect education and welfare programs.  Shannon Murphy, a spokesperson for State Assembly Speaker John Perez, states:  “It’s shocking that every single one of the governor’s budget moves deliberately hurt people.”

Patty Velez, president of the California Association of Professional Scientists, blames the Governor for taking “another punitive measure” against state employees.  The sentiment of Californians, however, seems to be against the tax increases that are virtually the only way to pay California state employees in the current fiscal crisis. Last year, every state ballot initiative offered by the politicians in Sacramento was emphatically rejected, in some cases with the ballot initiative losing in every single county of the state.

Some commonsense math may help explain the reason for the impasse. The population of California is about 36 million. The state deficit, therefore, is over $500 for every man, woman, and child in the state: over $2,000 for the average family of four. That is not what California state government is spending per person; it is just what California state government is spending over state revenue. The state budget itself (or what it will probably be, once a budget has been enacted) will probably be around $90,000,000,000 or about $2,500 per person in California. The average Californian is already paying about $2,000 per year in state taxes and revenue measures, or about $10,000 for a family of four. That is in addition to county and municipal taxes, which also are very high in California.

It is almost impossible to see what the politicians in California are going to do to keep the state from falling into the category of deadbeat governments we have seen recently, such as in Greece and other European nations. California, like Greece, is a beautiful land blessed with long coastlines, wonderful climate, nearby mountains, and many natural delights. The narcotic of government spending, however, has made California a junkie — and no one can know how it will get its next fix.

Photo of Arnold Schwarzenegger: AP Images
 

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Michael said:

... Arnold should have stayed in Hollywood. On the other hand, maybe that was part of the problem in the first place. We've all heard about "Hollywood Bookkeeping". I just read today in "National Review" that the last Harry Potter movie, which made almost $1 billion worldwide, is still according to Warner Brothers in the red ink by $167 million!! That is because of big budgets, in- studio expences, and huge paychecks for stars and the major people behind the camera, director, producers, ect. It's possible Arnold just brought that mindset with him when he became governor. Which one is to blame? Being a RINO? Being Hollywood? I would say probably being both.

July 30, 2010

Taxed to death said:

Corrupt unions and dems Yup, blame Arnold for over paid gov workers! It's time to start firing them and privatizing as many as possible. Get rid of those corrupt unions, towns, cities, and counties should go bankrupt and get rid of those corrupt union employees. Your state is a joke, i can't wait to see it go down the drain. To bad you couldn't grow any brains in that corrupt state, like you do crops. Cops, teachers, firemen making 150k, are you people nuts? Get rid of them and start over.

July 30, 2010

rich mckone said:

There is a simple way to deal with about half of the California deficit! Shifting parole to counties would cut billions from prison system costs. With the courts dealing with technical violations, the technical parole violation rate would return from 35% to the national average of 20%, reducing annual prison operating costs by over $500 million. Housing technical parole violators in contract beds would reduce prison costs by well over $400 million annually. Contract beds cost $22,500 less annually than a prison bed and nothing for construction. California has less than 3% of its inmates in contract beds compared to 12% in Texas. These changes would eliminate the need to build almost 20,000 prison beds at a cost of $2 billion to $3 billion. The bulk of the $6.5 billion in AB 900 construction funds could be applied to the deficit.

July 30, 2010

Jerry said:

Don't blame the governor California has a weak governorship - it's the communist state legislature, totally beholden to the public employee and other unions and idenity politics that have ruined California. Arnold isn't much of a help, but he isn't to blame - only when the lines in California are redrawn to break up the ridiculuous liberal stranglehold and people actually come out to vote can there be any hope of positive change.

July 30, 2010

Joe S. said:

A little perspective, please The California deficit works out to $600 per citizen, while the US federal deficit works out to over $4000 per citizen. So if California seceeded from the Union, Californians would have a $3400 surplus per citizen. But without the federal government, who would protect us from underpants bombers?

July 30, 2010

Rick said:

Split the State Lengthwise Hard-working taxpayers should not suffer the consequences of the communist Legislature's crimes. By splitting the state lengthwise, 90% of the state's liberals would occupy a strip 20 miles wide along the coast. The remaining interior could join tax-free Nevada, become a new state, or secede from the US entirely. Any of these scenarios would allow Free Americans now residing in California to escape the crushing burden of debt that the liberals are thrusting upon them. Split the state, and repudiate the debt.

July 31, 2010

Michael said:

... Perhaps some of the state would like to also join Oregon or Arizona? Their financial problems are minor compared to California's, plus Arizona is taking a stand againt illegals.

August 01, 2010

R Jensen said:

Debt or deficit? "If the furloughs were permanent, the annual savings to the State of California would be $1,200,000,000, which means that it would take over 15 years of furloughs to close the state budget deficit." Do you mean debt, not deficit? If it is a 15bn annual deficit, then the savings will never catch up. It must be debt. Please use correct terminology.

August 01, 2010