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Well, Californians basically rejected all of yesterday’s budget initiatives, and since they were mostly gimmicks I don’t really blame them.  So what’s next?

Beats me.  There are legal, judicial, federal, and contractual limits to how much spending can be cut, and there are political limits (i.e., the Republican rump in the legislature) to how much taxes can be raised.  The sums just don’t add up.

Californians are living in a dream world.  Prop 13 slashed property taxes and nobody wants to amend it, even for commercial property.  Arnold Schwarzenegger got elected in the middle of a budget crisis by promising to cut taxes.  When that proved to be an unsurprising disaster, the voters approved billions in borrowing, making the budget situation even worse.  It’s easy to blame Sacramento for this mess (and I do!), but the public has been complicit every step of the way.

Historically, California has been a high tax/high service state.  That’s fine.  Some states prefer a low tax/low service model.  That’s fine too.  (It’s a lousy idea, I think, but fiscally it’s fine.)  But over the past few decades we Californians have somehow concluded that we can be a medium tax/high service state.  It’s a fantasy.  Unfortunately, I’m not sure just what it’s going to take to jolt everyone out of their delusions.  Stay tuned.

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