Can You Balance California’s Budget?

This menu  forces you to think through some tough choices and tradeoffs.  At least on paper, I balanced the state’s budget while protecting the UC, and not soaking business.  Maybe I am a decider.

Author: Matthew E. Kahn

Professor of Economics at UCLA.

16 thoughts on “Can You Balance California’s Budget?”

  1. I basically did the above, aside from the most regressive taxes. And can we please soak the rich? Nothing personal, they just don’t deserve it the way they think they do. They’ll be fine.

  2. It is very easy for one person to balance the budget.

    It is very difficult for 54 Assembly members, 27 senators and a governor to agree on how to balance the budget.

    It is even more difficult for all of those people to do it, and then get re-elected and have a chance to do it again the next year

  3. Should have looked at the options first — looks like funding for the State University and UC systems are linked. No opportunity to fund one at the expense of the other.

  4. I balanced the budget under the Sac Bee computer program with no cuts in any spending on the poor or moderate income, nor any cuts to mental health programs, nor cuts in any education. I did it through increased taxes, though I did not increase any sales tax, including no increase in alcohol or cigarette taxes. I went with Brown on the redevelopment agency cut, which put me well over the top with $1 billion to spare. What I would say the Sac Bee missed is restoring the top marginal income tax rate we had under that noted Communist, Pete Wilson (1990-1998). Had that been included, and not merely extending the compromise, we could save some redevelopment funds.

  5. Why do I want to balance the CA budget? I want my government to be run like a business. Haven’t you heard be scream that at town halls? Again and again? Here let me hoist it into the air again:

    I want my government to be run like a business.
    I want my government to be run like a business.
    I want my government to be run like a business.
    I want my government to be run like a business.

    Business always takes on debt, even when it is flush with cash.
    So why do I want to balance the CA budget?

  6. Dave, that’s the threat. And maybe a few will. But I really doubt that Beverly Hills, Malibu, Marin, etc. are going to be emptying out any time soon. And I suppose it is a practical consideration. But morally, the concept of not changing laws just because some people don’t like it is pretty lame.

    Bruce, for me the point of these games is always to pop the Republican canard that Democrats can’t balance the budget. Of course, you’re right in pointing out that the politics is another story. We’ll see how the public enjoys the Republican slashing of public services.

  7. “I want my government to be run like a business.”

    Yeah, we should add in a $50,000,000 bonus for the governor.

  8. “establish automated camera system to catch speeders”. You mean California doesn’t have this already? Big Brother set up the first automated traffic cameras in Britain 30 years ago!

    Mind you, it’s the wrong mindset to use this technology primarily for fund-raising. That way, you instal cameras first on busy freeway sections where everybody is breaking the law a little but pretty safely, and not on lightly-traveled but lethal black spots.

  9. @ Mitchell Freedman:

    Why on earth would you NOT want to tax alcohol more heavily? The current tax is well below the external cost, amounting to a subsidy for heavy drinking. CA could easily bring in $2B per year without costing a social drinker more than $6/mo.

  10. What’s most interesting about that list is what you need to do to close the gap if you follow the republican position and leave out any new revenue. It can be done, but it requires everything else. Every single draconian cut, every budget gimmick, every transfer of liability from the state to municipalities. That’s what the California republicans want to force on the state.

  11. I did not know, Mark. Really, I didn’t. My understanding is that we’ve increased alcohol and cigarette taxes quite often in these past 25 years, and I thought it was time for a break for the regular folks. I don’t smoke and I don’t drink, so I only know what I hear from those who do either or both…

    What is the external cost for beer that creates a subsidy for beer tax wise? Is it somehow more than the difference between the cost of soda and the retail price of soda, for example?

    I’m fine with increasing the alcohol tax, but I don’t want a “whiskey rebellion” fueled out there either…:-) The fascism meter is pretty high in this nation right now as we find most Americans lack a language for anything that we might aesthetically call socialist in that Western European, Michael Harrington or Daniel Bell sense.

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