8/01/2004 11:05:42 AM|||Nathan Moore|||

The new budget in California has been lampooned by the Associated Press. Democrats are complaining about being blocked in, and that is supposed to be a bad thing.

The LA Times has a similar, if not harsher, take on the budget situation. But buried in the details of the article is this nice morsel

The budget Schwarzenegger signed is balanced with at least $15.6 billion of borrowing. The biggest chunk of that is $11.2 billion from the deficit bond package voters approved in March. The rest will come in several billion dollars of IOUs to various programs and a $920-million loan to make the payment into the pension fund for state workers.

First, just blame the people for the bond issue. Sure, the pain is delayed, but it will eventually have to be dealt with. To hear the governor talk about the budget, the intention is to cut state government over the duration of his term. This year's budget is indeed a quick fix. However, the IOU's to "various programs" amount to $3.5 billion. This money need never be paid. You cannot owe yourself money, contrary to the most concerted spin. Point is, California didn't raise taxes - a showdown is brewing.

Schwarzeneggar has purposely set up a future budget collision. Neither the Democrats nor the Republicans are happy with the budget this year. Watch California closely - this may yet be the beginning of a brilliant political stroke by the governor.

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