Overspending leads to $68 billion projected budget deficit in California

Overspending leads to $68 billion projected budget deficit in California
California Gov. Gavin Newsom

Next year, California will have a state budget deficit of $68 billion, according to the California’s Legislative Analyst’s Office. As Cal Matters observes, “This projected deficit would be a record for California. But officials noted that it is partly because the budget has grown so much in recent years — the most recent was more than $300 billion — and that the state has closed similar or worse spending gaps, by percentage, in the past.”

California’s state budget has skyrocketed since 2021, when state spending per resident was already about 60% higher than in the typical state. “Newsom and legislative Democrats have increased spending by more than 60%,” laments a Republican legislator.

One way to reduce the deficit would be “a paring down of the minimum wage increase for healthcare workers that starts in January and eventually reaches $25 an hour. Newsom signed the deal between unions and hospitals last month without a clear estimate of how much it would cost.  It turns out the wage increase could drive up the cost of providing care for government agencies by at least $4 billion in 2024-25. Now, Newsom wants unspecified ‘major reforms’ to the law and is talking to Democratic leaders in the Legislature, the Los Angeles Times reported Thursday.”

But it is hard to see such common-sense changes passing the legislature, which is overwhelmingly controlled by progressive Democrats, and tends to do whatever politically-connected unions demand. The $25 minimum wage for healthcare workers will cover all workers in the covered healthcare facilities, even “janitors, housekeeping staff, groundskeepers and gift shop staff,” meaning that employees like janitors will be paid more if they work in a healthcare facility than if they work in any other kind of facility. There is no logical reason for this distinction.

California could reduce its budget deficit by trying to attract businesses that pay taxes, but its business climate is bad, so businesses are moving to places like Florida, even though California’s weather is better and its landscape is much more interesting than Florida’s. Chocolate and rocket factories have moved out of California to lower-tax states with fewer anti-business lawsuits. Florida ranks high in the Forbes Best States for Business rankings, and California ranks low. In the State Business Tax Climate rankings issued by the Tax Foundation, Florida ranks 4th, while California ranks 48th.

California has adopted pro-crime policies that have contributed to an exodus of residents, with high living costs being an even bigger factor. California has a violent crime rate of 500 per 100,000 people in 2022, compared to 259 per 100,000 people in Florida. Former California Governor Jerry Brown approved “parole for roughly 2,300 lifers convicted of murder.” His successor, Gavin Newsom, has been even softer on crime. Under him, California made tens of thousands of violent offenders eligible for early release (including killers), and it earlier expanded parole for young adults who committed murder.

Newsom and Brown ignored the lessons of history. Crime in California fell significantly after California voters adopted Proposition 8, which mandated longer sentences for repeat offenders. A National Bureau of Economic Research study found those longer sentences deterred many crimes from being committed.  Sentencing enhancements prevented crime by dissuading people outside of prison from committing crimes, not just by keeping convicted criminals in prison where it’s harder to commit a crime.

California is squandering its natural resources like water, and the state is removing four power-producing dams from the Klamath River that have provided flood control.

Hans Bader

Hans Bader

Hans Bader practices law in Washington, D.C. After studying economics and history at the University of Virginia and law at Harvard, he practiced civil-rights, international-trade, and constitutional law. He also once worked in the Education Department. Hans writes for CNSNews.com and has appeared on C-SPAN’s “Washington Journal.” Contact him at hfb138@yahoo.com


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