$5 Billion - Obviously Not Enough
$5 Billion is a ton of money, no matter how you slice it. The Mr. Olympia Guv, Ahnold, The Terminator, is proposing to use much of the unexpected windfall to pay down Kaliforneya's mammoth state debt. What a novel proposal! Of course, the Dems in the Cali state legislature are shuddering at the prospect at actually retiring some debt. The good Guv has indicated he'll spend a huge percentage of the $5 bil to bolster the state's education budget. Predictably, that's not enough for the teacher's union controlled legislature. They want even more.
I'm a huge proponent of education spending, up to the point where it gives the students maximum benefit. After a while however, you can reach the point of diminishing returns. Just look at DC. They have the highest per student education funding and one of the worst educational systems in the nation. Support education. We can't have a vibrant society or economy without it, but don't continue to saddle future generations with oppressive debt that threatens their future.
Where did all this extra cash come from, you may ask? Amazingly enough, not from raising taxes, but because the state's economy actually grew! California's state and local tax burden fell from ranking 9th in the year 2000 to 15th today. The people of the good state, as might be predicted, responded by spending that money in their state and local economies at such a rate that it caused them to expand. Lo and behold, the economy grew to such an extent that the state pocketed more green. It's pretty simple, really. A smaller piece of a much bigger pie works out to more than a bigger piece of a smaller pie. Of course, Kali still has one of the worst business tax pictures anywhere in the nation, causing business to flee to neighboring states. At $193 per capita for state and local corporate income taxes collected, California ranks number 7 in the nation. Stop the madness.
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