MONEY FOR NOTHIN'
January 29, 2009
The Golden State expects a record $42 billion deficit over the next year and a half, the largest pool of red ink ever in a state. Can it plug such a big fiscal hole? Maybe, says Investor's Business Daily (IBD).
Gov. Arnold Schwarzenegger has pushed a wide range of new taxes on everything from golfers and car repairs to veterinary care and tickets to sporting events. And now, the $825 billion stimulus bill may bring billions more to California, says IBD:
- The stimulus will dole out about $200 billion to the states to help shore up their budgets.
- California is slated to get $22 billion of that.
Is that a good thing? Probably not. It's not aid, per se; it's a bailout. Basically, California's irresponsible legislature has spent the state into near fiscal oblivion. Now it will get bailed out by its big-spending friends in Washington, says IBD.
So expect more fiscal irresponsibility in California, not less., says IBD:
- According to the Milken Institute, California's business costs in 2006 were 22.9 percent higher than the average state; taxes were 21 percent higher.
- Now, new green rules to cut C02 emissions will only make things worse for businesses, which are leaving the state in droves.
- As for the budget, California's debts are already at junk status after a decade that saw spending soar 134 percent to $131 billion.
- Last year, 132,000 people -- many of them middle-class entrepreneurs -- pulled up stakes and left the state.
Source: Editorial, "Money For Nothin'," Investor's Business Daily, January 28, 2009.
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