As a former budget director for the Senate Republicans, I ask myself this question every time we face a deficit – Why not cut spending instead of raising taxes?
Today Governor Schwarzenegger called a special session of the Legislature to address an $11.2 billion shortfall in state General Fund revenues. This shortfall is so sudden and so severe that we have to act immediately, and we have to both cut spending and raise taxes.
When Governor Schwarzenegger came into office, General Fund spending was $78 billion. If all the cuts proposed by the Governor in the special session are adopted, we will spend $99 billion this year, which equates to a 4.77-percent annual increase. The amazing thing about that number is that it is actually a bit less than we would be allowed to spend if the Republican "hard spending cap" had been in effect when the Governor took office. Specifically, population and inflation growth over that time was 4.84 percent annually on average.