4.4 Billion Answers For The Windfall Surplus
By Howard Kaloogian
Any way you look at it, $4.4 billion is a lot of money. To put it in
perspective, $4.4 billion buys 977 million super-sized value meals at
McDonalds. Or 187,000 comfortably equipped Ford Explorers. Or allows
25,200 families to move into their starter homes. Remember the $4.4
billion number the next time you examine your pay stub or write that
mortgage or rent check. That is your hard-earned dollars going to the
bureaucracy to squander.
Remember also that a surplus is not a budget. It is the amount of money
left over after every program has been fully funded. After education
receives its $32 billion, doubling the amount spent on schools in the
past four years (putting California 29th in the nation for per pupil
spending). After police and fire are funded, future roads are allocated,
and welfare programs are paid.
After all that, we still have $4.4 billion left over - a windfall
surplus. Our surplus is larger than the entire budgets of 23 other
states. Our surplus alone is larger than the entire governments of New
Hampshire, Vermont, North Dakota, South Dakota, Montana and Wyoming
combined!
There has been much discussion about the state budget being overdue and,
specifically, how a surplus should make it easier to pass a budget on
time. Lost in the frustration is one profound truth: The issue is not
just when the budget gets done, but what gets done in the budget!
The budget impasse is not just a political stalemate. Republicans seek
to reduce taxes while Democrats want to increase spending on welfare and
other pet social programs. Which philosophy of government should control
the current windfall surplus?
The two major political parties offer a choice between a belief that
people should work for the government or a vision that government should
work for the people. One party believes it has a right to spend every
penny it can take from you. The other party believes government should
be limited to only that amount needed for necessary services. The fact
remains, government does not exist to earn a profit.
Increased revenues in good economic times like today might not ever
result in a surplus, because the government could always invent spending
schemes to absorb all it confiscates. The same pressure that works
against tax cuts prevents today's surplus from being set aside in a
"rainy-day fund" for the eventual business-cycle downturn. Then, when
the economy slows and revenues fall, the cry will be loud to feed that
bureaucracy and pressure will mount to raise taxes even higher than they
are today.
This issue is not new. During the 1980s, revenues to the federal
government doubled, which could have resulted in surpluses. Congress'
appetite for spending dramatically outpaced it, however, resulting in
huge deficits. Then, when the recession of the early nineties hit, taxes
were increased.
It wasn't until voters changed the party that controlled Congress from
Democrat to Republican that a balanced budget became possible. Let's
learn from that recent history: Do not waste the $4.4 billion on growing
the bureaucracy, increasing welfare subsidies, or in failed programs
that promise success if only they have yet more of your money.
Imagine, for a moment, that government today performs only legitimate
and necessary functions, and does so with no waste. If this was true,
reason dictates that population growth and inflation determines the size
of government. Currently, government would not grow faster than 4
percent per year. All revenue exceeding this limit is a windfall
surplus.
The nonpartisan Legislative Analyst's Office calculates that California
has enjoyed a nearly 8 percent annual growth in revenues over the past
five years. If this trend continues, and the Legislature is successful
in capping growth of spending at 4 percent annually, the Golden State
will accumulate $49.4 billion in windfall surpluses between now and
fiscal year 2003-04!
Who should spend this money - the government or the workers who earned
it? The urge to spend is an addiction that afflicts many of my comrades
in Sacramento. But, think how much more you could spend on your children
today or save for a college education; quality family time together on
vacation; giving even more to your church or favorite charity; and
setting aside something for your retirement! All because you the worker
- not the government - decided how best to spend your paycheck!
Returning the windfall surplus through tax cuts lets you control your
money before the gluttonous government gobbles it from you.
History has shown us how to accomplish this. When voters replaced the
party in power in Congress, they mandated that a change must occur. They
rejected the idea that excessive government spending improves the
quality of life and instead embraced an emphasis on cutting taxes.
Now it is California's turn. The only way to permanently return this
windfall surplus is to change the party in power in the state
Legislature. With $49.4 billion at risk over the next five years, which
philosophy do you want in control? Do you really believe that government
today has no waste in the bureaucracy? Is your child's school better off
today than it was four years ago? Will more government spending improve
your quality of life?
Your next paycheck, ask yourself, "Do I deserve something more for my
labor?" You should hear the same answer 4.4 billion times. Now, what are
"we the people" going to do about it?
Howard Kaloogian is the assistant Republican leader in charge of policy.
He represents the 74th Assembly District, which stretches from Escondido
west to Carlsbad and south to Del Mar.
He can be reached at: howard.kaloogian@asm.ca.gov.
