NCPA - National Center for Policy Analysis


July 23, 2008

What has changed since Golden State voters ousted Gov. Gray Davis and cast their lot with Arnold Schwarzenegger's star power?  Not much --  except for $41 billion in new spending, says Investor's Business Daily (IBD).

At a point when most state lawmakers and chief executives have put their budgets to bed, neatly balanced, and taken off for some R&R, the Legislature and governor of California are still wrangling over a budget that is roughly $15 billion out of balance.

This is nothing new.  We've been hearing about these budget gaps, delays and political standoffs since before the current governor took office just under five years ago, says IBD:

  • The state is locked in the same boom-and-bust cycle that brought Davis down. Its economy is sagging, and the jobless rate soared to 6.9 percent in June, well above the national rate of 5.5 percent.
  • All this trouble will only be compounded if the Democrats get their way and push through an $8.2 billion tax increase on business and personal income.

Sadly, the most tangible legacy of the Schwarzenegger era so far is its explosive growth in state spending, says IBD:

  • It's up by $41 billion since Davis left, jumping from $104 billion in the 2003-04 budget (the last one that Davis signed) to $145 billion in the fiscal year just ended, 2007-08.
  • That's a 40 percent increase, or 33 percent on a per-capita basis.

Source: Editorial, "Totaled Recall," Investor's Business Daily, July 23, 2008.


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