Budget wildfire may be contained in California
The Colorado Legislature faces difficult budget decisions over the next few weeks. It must slash an estimated $1 billion from state spending slated to occur over the next 17 months.
But that’s nothing compared to California, where lawmakers had to deal with a looming budget deficit of $42 billion. Even if you factor in California’s substantially larger population, its budget deficit was still 5.5 times greater per capita than Colorado’s.
Legislators in California worked into the early-morning hours Thursday to pass a budget package that includes tax increases, spending cuts and borrowing to close the budget gap.
In a state that already has the highest sales- and income-tax rates in the country, according to The Wall Street Journal, raising taxes even more is hardly the best way to woo new businesses. And borrowing now to cover the deficit will likely come back to haunt the Golden State.
But spending cuts are definitely needed in many of California’s state programs, which have grown tremendously in recent years. We hope they are sufficient to provide a real turnaround in the budget of the nation’s largest state.
Meanwhile, Coloradans should be glad they have a couple of important budget restrictions in place, notably the TABOR Amendment and the “Arveschoug-Bird” rule, that prevented our lawmakers from going on a California-style spending binge when it appeared the economic good times might last forever.