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Wed, Jul 15 2009

Did the dotcom bust kill the California budget?

Douglas Rushkoff makes some valid points in How the Tech Boom Terminated California's Economy. I would offer a couple of other factors that hastened the difficulty.

Mounting numbers of immigrants have changed the California economy a great deal. Workers were willing to take low paying jobs in agricultural, industry and hospitality. Families and friends joined money to buy homes. We knew of more than one group of people using multiple incomes to buy second and third homes to develop into nursing homes, even as home prices soared. Emergency rooms became crowded with many new residents who had little or no medical insurance. Increasong numbers of immigrant children began to attend public schools just as the cost of administration and insurance in public schools was rising rapidly. Roughly half our budget goes to education, which should tell us that the cost of education must have something to do with our budgetary difficulties as a state.

I'm not anti-immigrant. But if we want real improvement we have to look the facts. If many of the immigrants coming into a state are in a lower income bracket, the state is going to collect less in taxes from those residents while the burden to educate and take care of health and employment for residents seems only to rise. Our policies and laws have encouraged that situation. If that's the way we want things, then we'd better get used to the idea that we're all going to have to pony up with more taxes to make ends meet. If we don't like the trend, then we'd better get used to the idea that we're not going to be able to have our cake and eat it too. That's going to mean hard choices, whether you're a dotcom survivor, a recent college graduate, a brand new immigrant or a retiree. Look around. We know a little more now about how we got into this fix. The question now is, do we want to keep going down the same path that got us into the fix or will we make do with less? Without changing major policies and laws, we can't afford that 4-layer-cake-with-frosting-for-everyone budget for even one more year.

posted at: 05:21 | category: /Miscellaneous | link to this entry

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