From the Sacramento Bee, I learn that California’s Legislative Analysis Office is projecting that California state government will have to borrow $20 billion at the beginning of its fiscal year in July in order to pay day-to-day bills. Evidently some such borrowing, in the form of revenue anticipation notes, is standard operating procedure for an entity that has to pay out money more or less constantly but tends to collect it in big hunks at tax deadlines.
But the amount here is extraordinary; only a month ago the cash needed was projected at $13 billion. Plus, the LAO argues that if the six ballot propositions are defeated on May 19, the state will need to borrow “well over $20 billion.” The ballot propositions, supported by Governor Arnold Schwarzenegger and most public employee unions (and Democratic state legislators, who follow the public employee unions’ bidding faithfully), are a package of tax increases disguised as spending cuts (well, there are some spending limits included).
One teachers union, in contrast, is opposed, presumably because it’s not getting a big enough take. The public employee unions of California look like hyenas arguing over which one gets to gnaw away juiciest part of the carcass of the state’s private sector. An added note: As my Examiner colleague Chris Stirewalt notes, the federal government is now threatening to withdraw stimulus funds if the state cuts the pay of unionized state-paid home health care workers. Once again, as in the Chrysler deal, the Obama administration is going to bat for the unions. Every hyena must have her supper.
California’s public policies have resulted in a March 2009 unemployment rate of 11.2%, higher than every other state but Michigan, Oregon and South Carolina—and the evisceration of much of the private sector in a state that is still the home of 12% of the nation’s residents. But affluent coastal Californians continue to vote for legislators who do the public employee unions’ bidding every step of the way because, hey, they’ll oppose any restrictions on abortion.