Sunday, June 14, 2009

California's Grim Quandary

California Governor Arnold Schwarzenegger's latest plan to plug a budget hole of $24.3 billion is one that may be more symbolic than anything else in achieving its goals, but it is most certainly original.

The latest plan to plug the gap is to phase out traditional textbooks in favor of online ones, which would be downloaded to laptops, iPods, and other electronic devices.

While Californian bureaucrats say that digital textbooks would cost much less than the roughly $100 or so students are forced to dish out for each new textbook today, the greater issue (read: problem) is the dire condition of the state's cumulative finances.

Unfortunately, this will only go a very minor way in alleviating California's ills. The state's main reason for such a budget shortfall is a mismanagement of resources and the housing bust, which has resulted in massive foreclosures plaguing the state--and, hence, a shortfall in tax revenues from erstwhile mortgage-paying families. Likewise, the state's resources are strained due to the massive amounts of money it pours into social programs like healthcare. Unsurprisingly, the most populated state in the U.S. also has its largest number of illegal immigrants, most of them from Mexico.

Although Mr. Schwarzenegger has ruled out tax increases, other mooted measures include mandatory furloughs of government officials--which have already gone into effect--and a shorter school year. Some prisons may be letting out its jailbirds ahead of time, too.

But cutting the budget by 15% for state departments is easier said than done. Such infamous fiscally profligate institutions will have to get used to this new reality. Yes, moves such as phasing out textbooks may make sense, but they are unlikely to get the job done.

Therefore, I am lead to believe that perhaps precisely such a move had a different goal in mind: creating hullabaloo to garner more domestic attention from Capitol Hill and hence rally more people behind Arni's other budget plans?

No comments: