Charge It!, Sell-Off, Cut Costs, Or Plan Better?

If you live in California and read the papers you can’t miss the excruciating debate over the state (and local) budget crisis. The state will be somewhere in the neighborhood of $15 billion in the negative if they don’t do something.

Does this sound familiar? You betcha. Our current governor came into power through an off-year election recall, because the previous governor “wasn’t living within the state’s means.” In other words, this negative budget crisis occurred just a few years ago—and the previous governor lost his job over it.

What did the previous governor do back then? He borrowed money to cover the deficit. (Charge it! Or the Republican view… Don’t Live Within Your Means!)

What is our current governor doing? He is cutting costs. But after a considerable amount of pressure from interest groups (remember the Valentine’s Day demonstration), he also decided that he would defer the cost-savings cuts for another year or so. (What does that really mean? Charge it, and pay later! Who cares about living within our means?)

So now we come to our local budget deficit. Looks like our city could be in the negative by a half a billion dollars. Two responses to this difficult budget decision has occurred. First is cut costs… an across the board cuts in all areas—including programs for the poor. The people who will hurt the most.

Second response? We read in the LA Times this morning that existing city-owned property will be sold off. (Sell-Off!) Why is this so controversial? Because many community leaders (including city council members) want to use this property to build affordable housing. Selling property to meet a one year budget deficit is just short-sighted, when building affordable housing can meet a long-term housing crisis for decades and decades of good use.

The reality is that our political leaders have difficulty developing long-term, rational solutions. What we really need is to develop a “rainy day” fund so that when the cycle of budget deficits occur, there is funding available without cutting crucial programs.

Without such long-term planning, what our political leaders are really about is a…

Sell out…

(Pic from www.sheldonbrown.com)