California begins issuing IOUs … to the peons

posted at 3:05 pm on July 2, 2009 by Ed Morrissey

Facing a budgetary crisis of its own making, California has begun to issue IOUs instead of cash payments to at least some of its creditors.  For the first time since 1992, the state government has too little cash to meet its obligations.  However, Governor Arnold Schwarzenegger insisted that the state was “responsible” enough for banks to accept the IOUs at face value:

California’s controller will start paying many of the state’s bills with promissory notes as soon as Thursday after lawmakers failed to close the state’s worsening budget deficit, adding a new measure of indignity to a state sinking deeper into dysfunction. …

State Controller John Chiang said his office is prepared to issue promissory notes totaling $3.3 billion in July.

It will be the first time since 1992 that California will have issued promissory notes. The move is almost certain to further damage the state’s credit rating, already the lowest of any of the 50 U.S. states, saddling taxpayers with billions of dollars in higher interest payments on bonds that have yet to be sold.

Issuing the promissory notes — formally referred to as individual registered warrants — also will have real-world consequences for those on the receiving end. Small businesses that rely on state contracts will be most affected. …

Bank of America announced Wednesday it would cash the state’s promissory notes for its customers through July 10, bank spokeswoman Colleen Haggerty said. Schwarzenegger and state officials asked other banks to do the same, noting that California has never defaulted.

“We will make those payments,” he said. “We are responsible.”

If they were responsible, they wouldn’t have to issue IOUs now.  The state government has been a model of irresponsibility for the past couple of years as this utterly predictable budget crisis approached.  They raised taxes and then discovered they’d misjudged revenues.  After that, they tried using referendums to get overtaxed Californians to raise taxes on themselves, and got spanked at the ballot box.  With six weeks to go after that, the legislature still refused to make the cuts necessary to avert the crisis.

How, exactly, is that “responsible”?

Felix Salmon at Reuters also discovers that not all creditors are created equal in California’s eyes.  Some people will still get cash rather than a wish sandwich in the mail.  See if you can discern a theme:

People who get California IOUs People California pays in cash
Grants to aged, blind or disabled persons University of California
People needing temporary assistance for basic family needs Public Employees’ Retirement System
People in drug prevention, treatment, and recovery services Legislators, legislative employees, and appointees
Persons with developmental disablities Judges
People in mental health treatment Department of Corrections
Small Business Vendors Health Care Services payments to Institutional Providers

Figure it out yet?  The people who most need cash get IOUs, while the people who could stand to operate on credit get cash.  I guess this is also “responsible”.


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Does anyone still even read the US Constitution? Article 1, Section 10 says very clearly that what CA is doing is illegal.

MikeA on July 2, 2009 at 4:03 PM

No Worries there. That will be interrupted to be just fine by a woman judge of Hispanic heritage who is smarter than the white men who wrote the Constitution.

Wade on July 2, 2009 at 4:09 PM

BigMike252 on July 2, 2009 at 4:05 PM

I’d recommend allowing the entire state government to go into receivership, and have a bankruptcy court determine how to straighten the whole mess out. Just sending all the leach politicians home would save a ton of money.

MikeA on July 2, 2009 at 4:09 PM

I was born here in California and have lived here all my life, but my husband and I are 5-10 years from retirement. Like others I don’t want to retire here. What state would be the best to retire in?

Rose on July 2, 2009 at 4:11 PM

Repeat of Soviet Russia anyone?

Dark-Star on July 2, 2009 at 4:11 PM

Care to comment?

AnninCA on July 2, 2009 at 3:53 PM

Yeah, we have property taxes higher than Louisiana and Oklahoma. Probably not higher than California though, which does have an income tax.

Vashta.Nerada on July 2, 2009 at 4:12 PM

guntotinglibertarian on July 2, 2009 at 3:40 PM — Harry Schell on July 2, 2009 at 4:02 PM

OMG — I would get more years than Mad Madoff.

IlikedAUH2O on July 2, 2009 at 4:12 PM

I’d recommend allowing the entire state government to go into receivership, and have a bankruptcy court determine how to straighten the whole mess out. Just sending all the leach politicians home would save a ton of money.

MikeA on July 2, 2009 at 4:09 PM

Don’t you think that is a lot of trouble when a community organizer could fix everything?

Wade on July 2, 2009 at 4:12 PM

I would never, ever live in that type of racist, sexist, ageist environment again in my life.

You do realize you live in CA right?

PappaMac on July 2, 2009 at 4:13 PM

What state would be the best to retire in?

Rose on July 2, 2009 at 4:11 PM

Honduras

Wade on July 2, 2009 at 4:14 PM

AnninCA on July 2, 2009 at 3:48 PM

As states are the laboratories of democracy, we can learn from the results of their experiments and apply those lessons elsewhere. The results demonstrate that the California approach to governance is not a good example for how any municipality, state or our country as a whole should be run. California doesn’t even seem able to cut its spending to be in line with its income. Why?

Loxodonta on July 2, 2009 at 4:14 PM

You do realize you live in CA right?

PappaMac on July 2, 2009 at 4:13 PM

This should be good…

BigWyo on July 2, 2009 at 4:15 PM

Rose on July 2, 2009 at 4:11 PM

I used to think Carolina or Delaware but the sharks around here just tore them up.

Carolina is full of FBI and Secret Service since they don’t tax certain pensions and Delaware has NO sales tax but makes it up with income soaking. I would be thinking of a farm in a low cost area (which is mostly the rust belt these days) or Las Vegas to party till the country falls apart.

IlikedAUH2O on July 2, 2009 at 4:16 PM

Does anyone still even read the US Constitution? Article 1, Section 10 says very clearly that what CA is doing is illegal.

MikeA on July 2, 2009 at 4:03 PM

No Worries there. That will be interrupted to be just fine by a woman judge of Hispanic heritage who is smarter than the white men who wrote the Constitution.

Wade on July 2, 2009 at 4:09 PM

Si!

Jeff from WI on July 2, 2009 at 4:17 PM

Obama cannot bail them out and they are hopelessly collapsing.
artist on July 2, 2009 at 3:15 PM

ORLY????

Wanna bet?

BigWyo on July 2, 2009 at 4:17 PM

What state would be the best to retire in?

Rose on July 2, 2009 at 4:11 PM

Honduras

Wade on July 2, 2009 at 4:14 PM

The state named after a Korean car?

Jeff from WI on July 2, 2009 at 4:18 PM

Jeff from WI on July 2, 2009 at 4:17 PM

Yay Favre!!

BigWyo on July 2, 2009 at 4:20 PM

Obama cannot bail them out and they are hopelessly collapsing.
artist on July 2, 2009 at 3:15 PM

ORLY????

Wanna bet?

BigWyo on July 2, 2009 at 4:17 PM

I’ll rephrase on his behalf… Obama COULD bail them out, but it will hurt his chances of getting his other priorities through like ObamaCare and Cap-and-Trade.

He knows that bailing out Cali will piss people off to the point where 2010 could be a bloodbath for them.

teke184 on July 2, 2009 at 4:21 PM

Why?

Loxodonta on July 2, 2009 at 4:14 PM

Very simple. Their own draconian Environmental laws forced business out of State.

They raised the price of energy to the point where California business’s were not competitive.

Thus, less tax revenue as manufacturing moved out…

You know, kinda like Obamas plan for the entire US?

Romeo13 on July 2, 2009 at 4:21 PM

You do realize you live in CA right?

PappaMac on July 2, 2009 at 4:13 PM

Yeah, isn’t it funny how I can drive anywhere in Denver and feel safe…

But there are neighborhoods in California, especialy LA, where I don’t go even armed…. because of my race…

And won’t wear my old Ship’s Ballcap in San Fran?

Heck… I don’t even feel safe in Atwater Calif, the town that I was born and raised in… where my Mom still lives.

Romeo13 on July 2, 2009 at 4:24 PM

You know, kinda like Obamas plan for the entire US?

Romeo13 on July 2, 2009 at 4:21 PM

But, it’s just California. Pay no attention. It will work great if done nationally. Is that the logic?

Loxodonta on July 2, 2009 at 4:25 PM

The state named after a Korean car?

Jeff from WI on July 2, 2009 at 4:18 PM

Yes. How bad can it be seeing it is not in bankruptcy like others I will not mention, GM and Chrysler and still not paying with IOU’s.

Wade on July 2, 2009 at 4:26 PM

Looks like the social experiment is Not so good.
Give it to FIAT, the UAW and Mexico.

seven on July 2, 2009 at 4:30 PM

teke184 on July 2, 2009 at 4:21 PM

Ok…So California has all of these IOU’s floating around. For how long? The Loser in Chief just got a big boost on the FrakenTard thing.

I’m pretty sure The One’s dog$hit policies are going to be fast tracked big time…even faster than they’ve tried so far.

He get’s Crap and Trade through. He get’s the ObamaCrap Health Care in just like the Crap and Trade…game over. 99% of America dependent on the goddamed government.

BigWyo on July 2, 2009 at 4:31 PM

I’ll wait to see what the logic is before commenting.

AnninCA on July 2, 2009 at 3:06 PM

In other words, you are voting “present”…

right2bright on July 2, 2009 at 4:33 PM

Did the Lawyers get around this because an IOU is not a ‘Bill of Credit’? (Never mind that it sounds like one to me.)

Article 1, section 10

BobOfTexas on July 2, 2009 at 4:33 PM

“We will make those payments,” he said. “We are responsible.”

Hahahahahahaha!!!!!!!!! Gasp! Snort! Wheeezeeeeee!
Thanks, I needed that!

GarandFan on July 2, 2009 at 4:34 PM

Heck… I don’t even feel safe in Atwater Calif, the town that I was born and raised in… where my Mom still lives.

Your solution is personal. I’ve lived in Los Angeles for 30 years.

I have no interest in owning a firearm.

In fact, I find your type sort of scary. You’re the ones in the paper often. You shoot “intruders.”

Sometimes, they are your family members.

No thanks.

AnninCA on July 2, 2009 at 4:36 PM

Does anyone still even read the US Constitution? Article 1, Section 10 says very clearly that what CA is doing is illegal.

MikeA on July 2, 2009 at 4:03 PM

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;

*_emit bills Bills of Credit
*_any Thing but gold and silver Coin a tender in Payment of Debts
Yep, you are certainly correct.

right2bright on July 2, 2009 at 4:39 PM

Your solution is personal. I’ve lived in Los

Angeles for 30 years.

I have no interest in owning a firearm.

In fact, I find your type sort of scary. You’re the ones in the paper often. You shoot “intruders.”

Sometimes, they are your family members.

No thanks.

AnninCA on July 2, 2009 at 4:36 PM

How many “intruders” are shot compared to how many are shot in the street by hoodlums…do you know the stats?
I didn’t think so….
More people thwart crime with arms, then commit accidental shootings.
It is the hoodlums that shoot and kill…the citizens protect and defend.
Better do a little more research before spouting off such insincere liberal garbage.

right2bright on July 2, 2009 at 4:42 PM

AnninCA on July 2, 2009 at 4:36 PM

wow… so you basicly accuse me of shooting people? How interesting.

In the 20 years I lived in Atwater, there were TWO murders.

In the last 3 years in Atwater there were 4 murders within three blocks of the house I grew up in.

A freind of the family, who happens to be a Merced Sherrif, had his daughter shot at as she was joggin in broad daylight… why? she was wearing the colors of the College she went to in Fresno…

Personal?

And please, If your White, go take a walk in Compton.

California has divided itself along ethnic, and social lines. It is MUCH more of a divided state than it was 30 or 40 years ago.

Romeo13 on July 2, 2009 at 4:44 PM

Schwarzenegger insisted that the state was “responsible” enough for banks to accept the IOUs at face value

Sounds like the Guvenator is in the business of printing money. Of sorts.

I R A Darth Aggie on July 2, 2009 at 4:52 PM

I’ll take my payment in gubbiment cheese, please

guntotinglibertarian on July 2, 2009 at 4:53 PM

Does anyone still even read the US Constitution? Article 1, Section 10 says very clearly that what CA is doing is illegal.

Oh, Jeff, pleeeeeeze. The Constitution is sooooo 2008.

Nothing but a damn speed bump on the road to hopeychange.

guntotinglibertarian on July 2, 2009 at 4:55 PM

Romeo13 on July 2, 2009 at 4:44 PM

A typical strategy: Let’s not talk about what’s wrong in California. Let’s change the subject to what’s wrong with conservatives.

Loxodonta on July 2, 2009 at 5:00 PM

In fact, I find your type sort of scary. You’re the ones in the paper often. You shoot “intruders.”

Sometimes, they are your family members.

No thanks.

AnninCA on July 2, 2009 at 4:36 PM

Great stereotyping, Ann.

Every gun owner I know has taken classes in gun safety and gun laws and we know that you never, ever, ever shoot an “intruder” unless you or another person are in “imminent peril of death or serious injury” and that every option of retreat or escape is foreclosed. Period.

A lot of conservatives…and others…were very supportive of that guy in Texas who blew away the two illegals who were looting his neighbor’s home.

The responsible gun owners I know were appalled. You don’t kill people over property.

You’re not a bad sort, but please don’t pontificate on subjects you don’t understand.

Truth is, I own guns for two reasons:

1. I expect a breakdown of civil society.
2. I fear that freedom-loving Americans may need to defend ourselves against our own government.

Hell, I don’t even hunt.

guntotinglibertarian on July 2, 2009 at 5:01 PM

A typical strategy: Let’s not talk about what’s wrong in California. Let’s change the subject to what’s wrong with conservatives.

Well, as a conservative, I know that the only thing “wrong” with me is that I never can quite figure out how to extract the very last morsel of food out of the mouths of starving children.

I’ve tried, choking; compressive slapping of both cheeks…even picking them up by their ankles and shaking them. But the crafty little buggers always manage to sneak a few crumbs down their worthless little gullets.

Frustrating.

guntotinglibertarian on July 2, 2009 at 5:05 PM

California…

Too. Big. To. Fail.

juanito on July 2, 2009 at 5:09 PM

guntotinglibertarian on July 2, 2009 at 5:01 PM

You forgot one:

3. Alex Jones told me to.

BigWyo on July 2, 2009 at 5:10 PM

You forgot one:

3. Alex Jones told me to.

BigWyo on July 2, 2009 at 5:10 PM

Actually, it was a devil-dog. Sort of a Son-of-Sam redux.

Hey, good luck when the unemployment riots visit your neighborhood. Maybe if you wave your white panties, they’ll spare you.

guntotinglibertarian on July 2, 2009 at 5:13 PM

Well, as a conservative, I know that the only thing “wrong” with me is that I never can quite figure out how to extract the very last morsel of food out of the mouths of starving children.

I’ve tried, choking; compressive slapping of both cheeks…even picking them up by their ankles and shaking them. But the crafty little buggers always manage to sneak a few crumbs down their worthless little gullets.

Frustrating.

guntotinglibertarian on July 2, 2009 at 5:05 PM

Cut it out. Duh. It will be a bit “pre digested” but better than nothin’!

juanito on July 2, 2009 at 5:15 PM

This is where revolutions are suppose to start. Oh, wait,, America’s Got Talent is on tonight. Crap.

JellyToast on July 2, 2009 at 5:17 PM

AnninCA on July 2, 2009 at 4:36 PM

Now that’s spoken by a true Cali liberal.
Liberals are inherently afraid to own firearms.
It means taking control of your own life in certain aspects, something libs would rather the government do.
Also the statement “sometimes it’s a family member” is code for lib-speak meaning meaning the phony canard ‘you’re more likely to shoot a family member than an intruder.’
Which is complete and utter hogwash.
I personally have two instances where the sight alone of my gun has thwarted possible attacks on my person.
Those don’t make it into the paper because they don’t get reported.
Even when they do they’re not reported on because it doesn’t fit the template as El Rushbo would say.
You’re probably very nice and at least tolerable as far as female libs go, but I think you’ve spent too much time in California.
One more thing, please learn the difference in the meaning of the words ‘racist’ and ‘bigot’.
All of humanity has bigotry inside them. It’s a natural human emotion and no amount of legislation or phony righteous indignation from the left will remove it.
Now see what you did? I like to be brief,dang it!

Lanceman on July 2, 2009 at 5:24 PM

This is where revolutions are suppose to start. Oh, wait,, America’s Got Talent is on tonight. Crap.

JellyToast on July 2, 2009 at 5:17 PM

The Revolution has been postponed until after the mass-mourning for some pedophile who, if memory serves, produced a number of mediocre pop albums about 30 years ago.

The Revolution will commence shortly after said ceremonies, unless the Mylie-Cyrus-is-Pregnant rumors turn out to be credible, in which case the commencement of said Revolution will be announced by Nancy Grace. Unless some cherubic toddler goes missing.

guntotinglibertarian on July 2, 2009 at 5:25 PM

Unless some cherubic toddler goes missing.

Sorry. That should have read, “cherubic white toddler”. Missing black children don’t reach Nancy’s key demographics.

guntotinglibertarian on July 2, 2009 at 5:28 PM

Loxodonta on July 2, 2009 at 5:00 PM

You’re the antithesis of annin, foxy loxi.
God love you both!

Lanceman on July 2, 2009 at 5:29 PM

guntotinglibertarian on July 2, 2009 at 5:13 PM

*snicker*

Don’t really have a lot of ‘neighborhoods’ in my neck of the woods…

But if you come calling, I’ll just look for the dork in the camouflaged Carharts and a purple beret.

BigWyo on July 2, 2009 at 5:29 PM

But if you come calling, I’ll just look for the dork in the camouflaged Carharts and a purple beret.

And I’ll just look for the transplanted metrosexual waving his white panties.

guntotinglibertarian on July 2, 2009 at 5:32 PM

This is so typical of the arrogant state government elitists in Sacramento. They refuse to learn or change, they’re like a death row inmate who still says “F*ck You!” even as the needle is being stuck in his arm. Let the state go bankrupt and start over from scratch.

infidel4life on July 2, 2009 at 5:43 PM

I am wondering what would happen if Cailifornians just sent an IOU4afterUPAYME on April 15?

JellyToast on July 2, 2009 at 5:45 PM

Disgraceful. California has such wealth and resources that there is no excuse for this.

Terrye on July 2, 2009 at 6:07 PM

Heck… I don’t even feel safe in Atwater Calif, the town that I was born and raised in… where my Mom still lives.

Romeo13 on July 2, 2009 at 4:24 PM

OK, who are you? There are only about 3 people in Atwater and I only know of one family that actually raised their kids there. Plus, since it takes 30 seconds to drive through the town, and it is behind the Orange Curtain, why don’t you feel safe?

InTheBellyoftheBeast on July 2, 2009 at 6:35 PM

OK, who are you? There are only about 3 people in Atwater and I only know of one family that actually raised their kids there. Plus, since it takes 30 seconds to drive through the town, and it is behind the Orange Curtain, why don’t you feel safe?

InTheBellyoftheBeast on July 2, 2009 at 6:35 PM

Who am I?

Was typeing out a long description, but its easier to say I was one of the Ramey kids…from back in the 70s…

Romeo13 on July 2, 2009 at 7:05 PM

I’m still waiting for Arnold to utter the phrase “I told you so” when he tried to introduce a semi responsible budget and they shot him down so bad he crawled into a hole and didn’t emerge till last week.

These idiots were warned, and Arnie warned them. Now is the time to rub their noses in that fact and he’s completely taking a pass on it. I don’t understand. It’s good politics…by today’s standards anyway, so might as well play as the players do.

Spiritk9 on July 2, 2009 at 7:14 PM

Take a good look, folks, as this entire country will be in the same boat as California.

And soon.

-Dave

Dave R. on July 2, 2009 at 7:16 PM

What’s good for the goose is good for the gander.
It’s time for ALL California taxpayers to start sending Sacramento IOUs also.
I would refuse to send them a dime. I’m boycotting all taxes when I have the ability to do so.

roninacreage on July 2, 2009 at 7:27 PM

Wells Fargo is going to accept CA State IOU’s.

Why would they willingly take on more “Bad Debt”?

PappaMac on July 2, 2009 at 3:53 PM

If WF didn’t Uncle BO will tell them to do it any.

VikingGoneWild on July 2, 2009 at 7:29 PM

I wonder which is higher in CA: taxes or the cost of shipping everything you need in via Amazon or other online services?

Inquiring minds will soon find out, I bet.

ajacksonian on July 2, 2009 at 7:29 PM

ajacksonian on July 2, 2009 at 7:29 PM

Shipping is less costly, as long as you can plan a bit ahead (at least for computer parts)… got a buddy who runs his own Computer business out there that I still do phone type support for.

Romeo13 on July 2, 2009 at 7:33 PM

One interesting little detail — while California is asking banks to take these IOUs, the state of California will not take those IOUs as a method of payment for those who owe money (taxes, fines, fees) to the state of California — because they are not legal tender.

Seems rather obvious to me — if the state is unwilling to honor those IOUs by accepting them, it is fundamentally unreasonable to expect any private individual to take them.

RhymesWithRight on July 2, 2009 at 7:50 PM

Figure it out yet? The people who most need cash get IOUs, while the people who could stand to operate on credit get cash. I guess this is also “responsible”.

It’s clear that they think a welfare recipient can get his/her voucher honored by some institution while nobody is going to extend credit from a California judge or senator.

highhopes on July 2, 2009 at 8:37 PM

I’d like to see just one creditor receiving one of these IOUs turn around and commence the steps needed to seize state property as payment. I’m sure the Serra Building at 1st and Hill in L.A. sits on valuable land, for example.

Or CSUCI (see-sucky). Tear it down and build a nice coastal resort.

Take those neighborhood DMV offices and turn them into convenience marts.

You get the idea…

friendlygrizzly on July 3, 2009 at 5:57 AM

Once again, California leads the way.

bluegrass on July 3, 2009 at 8:24 AM

Hey, I’ll be back Gov. your state is in the sewer because of illegal aliens. Geez your stupid !!!!!

Baaboo on July 3, 2009 at 10:00 AM

Let’s get some perspective on the IOUs versus cash payments point.

The legislators should work without pay. But there is no reason I can think of why the Corrections officers should. And why should judges? California has to administer criminal justice for the number of people in a medium-size nation every day. Believe me, of all those on the cash side of the ledger, it’s these people I want getting their pay. (Civil court I’m not so concerned about. The lawsuits can wait.)

Regarding the retirees, I am getting really tired of hearing that their pensions are “the problem” for state budgets. You’re going to see in a minute what the problem is for state budgets. And no, I’ve never been a state employee and I don’t get a state pension. But “retiree pensions” means pensions for firefighters, highway patrolmen, and teachers as well as whatever sour-faced state bureaurcrats you may have had to deal with at the DMV or corportation commission (or fatcats from the University of California system). There is no way I am going to resent pensions for firefighters and the CHP.

Pensions amount to less than $10 billion in the 2009-10 budget anyway, compared to $40+ billion for welfare and state health programs. These words are some of the most Orwellian ever uttered:

People needing temporary assistance for basic family needs

Well, sure. That’s how the programs are legislated into existence: as “temporary assistance.” But that’s not how they are administered. The beneficiaries of “temporary assistance” are the ones described in this incredible communication. (For HA readers who might have seen this before, yes, this is the same link. Not trying to be a broken record, but it’s highly applicable to this thread.)

There IS no other set of public assistance programs, beyond the ones these people are on. These ARE the “temporary assistance” programs. All public assistance programs of this kind are “temporary.” That’s what the voters are told when the programs are crafted.

We should definitely be up in arms that cash assistance is being withheld from people on disability and in mental health treatment. If the state can’t balance its budget, then keep the help going to these people, and shut the university classrooms down (and issue the IOUs to the tenured professors and administrators).

But you need to know more about the developmental disability program in California. The 2009-10 budget proposal acknowledged that this program has metastasized uncontrollably — it just doesn’t acknowledge what the problem is.

The problem is that the program is designed as a hiring mechanism for specialists, and a means of letting contracts for building, maintenance, and administration. Its implementation standards require substantially more state-paid, state-mandated facilities and specialist care per developmentally-disabled beneficiary than the taxpayers can possibly afford.

Families facing developmental disabilities in their children do have specialty care and big bills to deal with. But is the best means of helping them to set up state programs that actually provide all the services? Not necessarily. It would certainly be more cost-effective to simply provide cash assistance, and let the families contract for the care and support they need through the market, and with institutions that are funded by a combination of private and state support. This could be done in the form of vouchers, as opposed to straight cash, to ensure assistance money was not misspent.

We need to seriously ask ourselves why the state needs to be the employer of first resort for a number of the career fields it has assumed that role for. Even more expensive for the California taxpayer than the state’s vast, unwieldy suite of welfare and health programs is its total education budget, for K-12 and the university system.

A minority of the K-12 budget goes to teacher salaries, and we ought to bring out the pitchforks and torches when the state fires teachers FIRST, instead of cutting back on administration, special programs unrelated to education (e.g., summer breakfast and lunch programs), and building programs. Do we have a school system to educate our children, or do we have it to employ non-teaching administrators, day care workers, and construction firms?

Few state spending decisions are as hard to justify when people are out of work and losing their homes as what the state puts into the university system. Huge expenditures are made on programs and faculty compensation that have nothing to do with preparing Californians to compete in a global interlinked economy, or whatever. When this pitch is made, voters think about things like engineering, information tech, biotech, etc — but that’s only a minor percentage of what their tax dollars are going to. Certainly, $400K salaries, plus university-provided personal vehicles and professional travel budgets for administrators are not funds that are putting professors in the classroom, or keeping the lights on in them. But neither are research grants for things private industry has no interest in researching, because they hold no real promise of utility or profit. It’s real nice to pay for such things when the uncaring free market will not — but operating the state at a deficit when people are losing jobs and homes, in order to keep doing it? What ARE our priorities, anyway?

J.E. Dyer on July 3, 2009 at 12:03 PM

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