The Golden State Is Made of Lead
Pollyannas say we’ll all be going back to Cali. I don’t think so.
Amid lengthy budget crises and nationwide snickering, you might not think anybody in the Golden State could still be shielded from harsh reality. After all, spending for the current fiscal year is a mere $86.6 billion, only $300 million more than in the previous year—an increase former Gov. Arnold Schwarzenegger described as “essentially flat.”
State spending is down almost $20 billion from its 2008 level, but that’s still not nearly enough to get Sacramento’s fiscal house in order. In December, less than two months after signing a putatively balanced budget that had initially come in with a $19 billion deficit, lame duck Schwarzenegger—supported by Gov.-elect Brown—convened an emergency session of the legislature to close an additional $6 billion gap that became apparent after the budget was enacted. Evidence for California’s looming insolvency is all around: a state of fiscal emergency in Stockton, a potential municipal bankruptcy in Los Angeles, a government bond rating that is the worst among the 50 states, unfunded pension obligations that could run as high as $500 billion over the next decade.
