California is in financial crisis and we know why

California is in a financial mess for a number of reasons. The coming financial crisis has been a long time coming.  Yet, the most damaging of the causes, can be
traced to the administrations of three governors.

The first is Jerry Brown 1, during what was known as the Governor Moonbeam, era.  He was perfect for the times.  He rode around in his old car and refused to
live in the Governor’s mansion.  Jerry was a press favorite.  Plus, he dated a
movie star.  However, there is one thing setting Jerry Brown 1 apart from any other Governor.  Jerry pushed for and signed a bill legalizing Public Sector Labor Unions in California.

No less than the Godfather of Liberalism, President Franklin D. Roosevelt, thought it was a terrible idea.   Roosevelt said in part, “the very nature and purposes of government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with government employee organizations.”

What Jerry Brown 1 did for Labor Unions goes far beyond the bargaining for wages and conditions of employment.  Jerry Brown 1 created the environment where, Governor Gray Davis, when recalled, made one final payment to the public sector unions which had supported him.  And this brings us to the second cause of
this mess:  the Gray Davis Administration.

According to Bloomberg news, Gray Davis “escalated the pay and benefits of 164,000 State workers” before leaving office.

Based partially on the actions of Governor’s Brown and Davis, Bloomberg News reports California is where the “states highest paid workers make far more than
comparable workers elsewhere.”  Bloomberg goes on to say; “Payroll data from 1.4 million public employees in the 12 most populous states” (show California is the place to work if you are a public sector employee.)  Not a bad thing, unless the state is broke, and this leads to increased taxes to pay the bill.

Jerry Brown II is more of the same.  His actions and inactions continue to expand our financial mess.  Jerry Brown II is the third administration causing hardship to the California economy.  One example of this is the request for a tax increase when the state is suffering from high unemployment.

However, California’s problems can be solved.  When asked how to solve this problem  David Crane of Stanford University, replied, “All it took was for political leaders to think more about the general population and the future rather than their
political careers.”  One example pointed out by Crane was the issue of overtime. 
Jerry Brown has not taken steps to curb the abuse of overtime.  One employee retired at $609,000 a year in a large part due to overtime being added to the base salary.

Some people would argue that as a Conservative, of course, I would think the state employees are overpaid.  This would be inaccurate, since I spent a number of years working for the state.  I actually thought the pay and benefits were
great due to the security offered by the state job.  It was only later, after the advent of the Public Employee Unions, did pay rise to the point the state could not afford to pay for the benefits.  State workers traded security for higher pay.  It was a gamble they may have lost.

When asking for higher taxes we are always told the state needs the money.  They are not alone; I often think more money would be helpful to my family.  But then
again, when the state takes the money, it is a lawful tax.  If I took your money by force, it would be a violation of 211 PC Armed Robbery.  In both cases we would have placed our needs ahead of yours.

Actually, state revenue is up 50% over the past ten years.  We don’t need more
money, revenue is not the issue.  The issue is excessive spending.  A large
part of the spending is due to excessive state employee benefit expenses.  The problem in California is a lack of leadership devoted to the general population.

One point must be made clear.  These state employees worked under a contract where promises were made.  We have a responsibility to honor the contracts and pay the amounts promised to retirees and those soon to retire.

So how do we fight the problem?  I have some suggestions.  First, we must stop the flow of small business to other states. Second, we must prioritize how we spend the money we have.  Third, we have to pressure politicans to work for us and not themselves.

Stopping the flow of jobs out of California comes down to two areas.  First, the issue of taxation must be addressed.  Simply stated, Taxes in California are too high.  No less than President Barrack Obama stated it was folly to raise taxes in a recession.  He then approved the Bush Tax schedule through the 2012 election period.  It is not a valid discussion to disagree with the idea higher taxes equal lower revenues.  To argue this point, it becomes one of politically held views.  There will be empirical evidence of this in the coming year.

Second, the regulations in this state are oppressive.  I heard a CEO talk about it
taking up to two years to open a restaurant in California.  In Texas they can get the same restaurant approved in two weeks.  That same CEO says in
California, his store managers, are restricted in ways not required in other
states.  In Texas, none of these restrictions exist. Even Hollywood is spending more money in Georgia than they are in California.  How do you get rid of
the restrictions? We elect people who are willing to address the issue, one
point at a time, based upon results and not politics.

How do we prioritize spending?  This will be a nightmare requiring courage, insight and a strong desire to restore our state.  We have to leave the idea of business as usual, and turn to addressing the issues.  This goes to my third point listed above.  We have to find people who are committed to fixing the problem.  We have to move away from ideas that are cosmetic, like reducing the amount spent on
cars for legislators, and get to the serious money. 

Every employee contract in California needs to be reworked.  Prison guards are a powerful, well paid expense.  There is evidence a better job can be done with prisons, by hiring the private sector, and paying a set amount for each inmate.  Our highways are a mess.  We need Caltrans to publish a list of every roadway needing repair and set a priority list.  We then need the gas tax to once again only be spent on highway infrastructure.    The State should sue the Federal Government and recover our cost for federally mandated medical/welfare costs. We need a top administrator (Governor) who understands how to control a budget.  I leave you with this tidbit from the L.A. Times today, “State workers misused $613,000 of tax payer funds.”  Where is theoversight?

Three administrations fueled this problem.  One, well run, committed administration with a mandate from the people can fix it.  We need to start looking for that person and support their run for office.  This person will not be a politician; they will be a private sector, hardnosed, get it done achiever.  This
concept will shake the nation, but will insure California is once again the
golden state.