Leg Analyst: 'Yup, we're still in the red.'

Mac Taylor, our state's Legislative Analyst, has gone on record as saying that the poison pill that our state had to swallow last month just to keep functioning apparently wasn't enough. This hardly comes as a surprise, though one of Taylor's suggestions rules out a sure-fire way to increase revenue that our state badly needs: namely, an increase in taxes. Taylor doesn't specify just what taxes we should or shouldn't raise; merely that we shouldn't raise any of them. With this, I suppose Taylor is acknowledging political reality. After all, in a state where it takes a super-majority of two thirds to pass a budget or increase taxes--and with Republicans in a minority of slightly more than two-thirds in both houses--an increase in taxes would be damn near impossible.

What genuinely worries me, though, is that the media in California are falling for this argument, hook, line, and sinker. An article in today's Sacramento Bee tells us what we need to know about the failure of the media to successfully address these issues:

"Unfortunately, the state's economic and revenue outlook continues to deteriorate," Taylor said in a 28-page report.

The development marks the second time in less than six months that bitter legislative clashes produced spending plans that immediately were threatened by the nation's deep recession.

The $8 billion hole would worsen by $6 billion if voters reject ballot measures May 19 to shift special funds and borrow against future California Lottery profits to generate money for state operations, Taylor said.

The gloomy forecast raises the specter of Democrats and Republicans renewing their vicious three-month fight over raising taxes or cutting services to balance spending.

Californians already face $12.5 billion in temporary tax hikes under the budget signed last month by Gov. Arnold Schwarzenegger. Sales and income taxes will rise, as will the state's vehicle license fee.

The Bee article quotes Senate Republican leader Dennis Hollingsworth who went on record as saying that "job creation and spending cuts"--not tax increases, not the funding of education and other vital social services to provide job training, not public works projects to create jobs--are the ways to close the budget gap.

Never discussed are two problems that got us into this mess in the first place: the aforementioned two-thirds rule, and Governor Schwarzenegger's first act upon assuming office: namely, rescinding the increase in the Vehicle License Fee, robbing state and county governments of much-needed revenue. This was one issue that Arnold rode to victory in the election that recalled Gray Davis, playing to the fiscal blowback resulting from what was then a $38 billion deficit.

It's worth noting that the California League of Women Voters has come out against four of Arnold's Special Favors, and remain neutral on two others. One can read their arguments (pdf warning) here.