On Thursday, columnist George Skelton of the Los Angeles Times wrote a piece analyzing Meg Whitman’s new radio ad. Skelton’s analysis gets the facts wrong. What’s even more puzzling is that the conclusions he draws are directly opposite the facts reported by his own Times colleagues.
Meg Whitman states in her new radio ad that government spending has increased 80 percent in the last ten years. The Department of Finance numbers are clear: General fund spending grew from $57.8 billion in 1998-1999 to $102.9 billion in 2007-2008. Meg used that ten-year period, from fiscal years 1998-1999 to 2007-2008, because they are real numbers. The state’s fiscal books have been closed for that period. The numbers can’t be recalculated or changed.
Logic and government accounting schedules tell us that there will be no reliable numbers for the 2008-2009 fiscal year that ended June 2009 for at least another few months, and likely much longer. Since the start of the 2008-09 budget through today, there have been three separate budgets passed, and there could be a fourth one before June 30, 2010. The books are far from closed on the current fiscal year.
So using our ten-year time period gives Californians the most accurate picture available of state government spending habits. And the Times’ own reporting of spending patterns confirms it.
On May 28, business columnist Michael Hiltzik reported: “Analyzing the 2008-09 budget bill last year, the legislative analyst determined that since 1998-99, spending in the general fund and state special funds — the latter comes from special levies like gasoline and tobacco taxes — had risen to $128.8 billion from $72.6 billion, or 77%.’’
A June 24 Times story by Shane Goldmacher underscores the huge liabilities in this year’s budget. Most of the budget plans he analyzed in June, including obligations to pay back billions in future years, were adopted in July. In his piece, Goldmacher used these descriptions: Accounting gloss, bookkeeping maneuvers, one-time fixes, gambits, push the pain into the future, accounting shifts, paper fixes, deferrals, sleight of hand.
And huge holes are already appearing in the current budget.
Consider that by early 2010, the Controller estimates we will be another $2 billion short from the most recently enacted 2009-2010 budget. And when accounting shifts and temporary tax increases expire and payback obligations come due in not so distant future, the state will owe billions more due in guarantees promised schools, local governments and others.
How can the columnist suggest that state spending is barely growing? The facts are the facts: Growth in government spending during the past decade has far outpaced inflation and population growth and continues on an unsustainable path.
Mr. Skelton’s other point is that Sacramento has only raised taxes sporadically in the past four decades. This conclusion requires a revision of history.
There is no mention in the column of Gov. Gray Davis’ $3.4 billion hike in the vehicle license fee in 2003, which was repealed by Gov. Arnold Schwarzenegger, or the repeal of the manufacturing investment credit that cost business more than $300 million a year.
Then consider the raft of legislation in the past five years that allowed local government to levy new taxes and fees, took away tax credits for teachers and made it easier to tax recreational vehicles, boats and planes. State fees continue to rise.
And in addition to February’s $12 billion increase in income, sales and car taxes, taxpayers are now being required to accelerate their payments to the state to deal with the looming budget deficit. In other words, the state is making us pay taxes sooner so that budget deficits don’t look so bad on the books.
The reality is that Sacramento has been on a decade-long spending spree that has led to the economic mess we’re in today. The current budget fails to curb state government’s spending habits and all but guarantees a new fiscal crisis in the near future. Meg’s ad accurately calls attention to the problems.