Our View: It's worse than governor thinks

The state's independent Legislative Analyst's Office reports the woeful budget picture painted by Gov. Arnold Schwarzenegger isn't woeful enough. It's worse. The state's budget deficit over the next 20 months will be nearly $28 billion, not the measly $22 billion the governor projected, according to the analyst's review released Tuesday. Then it will be $22 billion a year for each of the next four years.

The immediate deficit alone amounts to nearly $800 for every man, woman and child in California — that's $800 more than every man, woman and child already has paid. Nevertheless, the legislative analyst concludes taxpayers must pay more.

It's sadly ironic that one of Analyst Mac Taylor's suggestions is to increase the motor vehicle license fee. Gov. Schwarzenegger was elected in 2003 partly because of his opposition to that recently raised fee. Have we come full circle with the governor who promised to blow up the boxes, but under whom the budget has ballooned as never before?

At least the analyst acknowledged the governor's desire to increase sales taxes another penny and a half on the dollar and expand the tax to service industries would damage the already faltering economy by driving buyers to tax-free Internet venues, and will "worsen the impacts on durable goods spending (particularly cars)" by raising California's already high combined state and local sales tax rate to 9.5 percent, the nation's highest rate.

The governor's proposal to require one-day-a-month unpaid furloughs for state employees amounts to a 4.62 percent pay cut, the analyst noted. Why, when the budget shortfall exceeds 10 percent, are government employees asked to take only a 4 percent pay cut? Why are taxpayers, who aren't responsible for this fiscal disaster, asked to pay more than a 10-percent increase in sales taxes and more than 50 percent increase in car fees, to say nothing of proposing to double unemployment insurance taxes for employers?

Maybe most offensive is the legislative analyst's suggestion that the state "should continue to press the federal government for economic stimulus measures ... it could provide several billions of dollars in budgetary solutions."

It's bad enough that insurance, mortgage and banking industries bellied up to the federal trough for bailouts. Now the badly mismanaged, overspending state government is about to beg for bailout from Washington too.

The analyst is wrong that the state must "impose major increases in revenues," but right that "major ongoing reductions to current service levels" are necessary. The analyst concluded that "early action is critical," including immediate deep cuts in public school funding for the coming year. That's entirely right. But we aren't holding our breath.