Austin Hill

"Hi, I’m California, And I’m Addicted to Spending…"

What a magnificent confession this would be, if only we could hear it collectively from our 31st state.

Imagine -California emerges from its’ state of denial, and admits that it is addicted to government spending. And then, after acknowledging its’ addiction, envision the government of California coming to believe that a power greater than itself (the private sector) could restore its’ sanity, and then turning itself over to the care of that greater power, and, in so doing, checking itself into “rehab.”

Psychobabble and twelve-step metaphors can only go so far. But in all seriousness, our “friend” California has a very severe problem with spending, yet remains in denial. And there’s no indication that California will stop “using” anytime soon.

My native home state –which is also home to the highest mountain on the continent (Mount Whitney), the lowest valley (Death Valley), Facebook, “Surf City, U.S.A.” (Huntington Beach), the most robust farm land (the San Joaquin Valley), Google, Disneyland, Mattel Toys, The World Champion San Francisco Giants, Legoland, Cisco Systems, “Hollywood,” three U.S. Presidents (Richard Nixon by birth, and Herbert Hoover and Ronald Reagan by “adoption”), Mitsubishi Motors of North America, and the most notorious, mystery/non-existent NFL franchise (there are always rumors about L.A. getting a team again) – is in serious trouble.

I wish we could perform an “intervention” – perhaps at the Betty Ford Center (which, conveniently, is in Palm Springs) -and get dear California some help.

The last election provided an opportunity for California and the rest of America to admit that it had a problem, and then to begin working on its “recovery.” And while a good bit of the country took the first couple of “steps” among the twelve, the Golden State chose to remain on its current course.

“I’m just a social spender,” our friend California seemed to be saying last Fall. “I could stop whenever I want, but I don’t want to. I’m happy living this way, and I’m not hurting anybody, so quit hassling me…”

Evidence of this denial was apparent in the days immediately following the election. As if the $6 billion budget shortfall that he presided over didn’t really exist – a deficit that is expected to expand to a whopping $24.5 billion over the next eighteen months - outgoing Governor Arnold Governor Schwarzenegger called the legislature in to a “special session,” and then held a press conference to announce his “really big plan.” For a second and final time before leaving office, he was going to try to - - cut spending? – no, no, he was going to try and legislate a state-wide ban on plastic grocery bags. This, he explained would help save the planet, but would also create “green jobs.”

But that was last December. Now, a guy who was Governor for eight of my elementary, junior high and high school years is Governor yet again. A perennial government employee, Jerry Brown is back in Sacramento, and he appears ready to continue the addictive cycle.

The problem with California’s budget, Governor Brown seems to be reasoning, is not that politicians had spent too much or that government agencies are wasteful. No, Jerry Brown seems to be treating the spending problem as merely a “revenue” matter – if he can confiscate more revenue from private people and put it in to “public” coffers, he can “fix” the problem, and continue on the current course.

With less than 2 months in office, Governor Brown has already hinted that California’s famous “Proposition 13” might need to be undone. In case you’ve forgotten, this was a landmark ballot proposition that drew a record number of voters to the precincts in 1978. It passed in a landslide, and imposed a statewide limit on the rate at which local counties and cities could levy property taxes.

Along with a possible “tweaking” of Proposition 13, Governor Brown is also proposing to retain several tax increases that are supposed to expire later this year. And he says he wants to “let the people decide” – he’s not pushing for these tax increases to happen legislatively, but rather, he wants Californians to vote on them in a “special election” this June. Just as the people of Egypt want their voices to be heard in Egypt’s government, so Governor Brown reasoned, “it would be irresponsible to exclude the people from this process.”

In addition to the tax increases, Governor Brown has proposed some modest sell-offs of state owned vehicle fleets. But he’s ignoring serious systemic problems: California’s state employee retirement pension funds have been severely mismanaged and present the state with huge liabilities; and California goes further in to debt roughly $40 million each day, just paying-out the state’s generous unemployment benefits.

Isn’t this just a classic example of an addiction problem? “I could stop at any time, but I don’t want to. Just give me more of my drug-of-choice, and I’ll be fine.”

Our friend California apparently hasn’t “hit bottom” yet.


Austin Hill

Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.