California: Democrats give up on tax increases, await governor's next move

SACRAMENTO (AP) - Leaders of the Legislature's Democratic majority said Tuesday they are setting aside a long-standing call for tax increases to close the state's $8.6 billion deficit next year and instead will concentrate on closing tax loopholes and chasing more federal support.

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[Schwarzenegger's] $111.7 billion budget allows for increased funding almost across the board and represents $6.4 billion more in spending than the current year's budget... The deficit, estimated in recent weeks at $8.1 billion, was raised Monday to $9 billion to account for a $500 million reserve the governor wants and a $450 million settlement of a flood case the state lost last year... The governor's plan calls for no new taxes but uses $3.5 billion in loans to help close the budget gap.

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$3.5 billion is a shade under 3.2% of the budget. Anyone reading this could tighten their monthly household expenditures by 3.2% to live within their means. To fund a profligate lifestyle with debt is irresponsible. One is tempted to call it "Gray Davis' Disease", except now it's Schwarzenegger who has delivered a debt-based budget for two years in a row, matching Davis' sorry record.

While the no-tax-hike news is certainly welcome (though cuts in our economically-afflictive sales and income taxes are long overdue), Schwarzenegger is fast becoming a disappointment. His fiscal stewardship is far too accommodating of the spending whores in the Legislature; he's done nothing substantive to reduce the size of government, and he's a gun-grabber. I credit him with a marvelous star-turn at the Republican Convention that brilliantly illuminated the pro-individual, small-government philosophy that supposedly anchors the GOP, but mere words--and muscles--aren't keeping him from being Just Another Round-Heeled Pickpocket in Sacramento.