Across California, people are feeling lucky. How else can you explain a story in the L.A. Times last week that welfare recipients have withdrawn approximately $1.8 million from ATMs on casino floors in the last eight months? The California Department of Social Services overlooked the fact that the debit-cards that they issue to those who qualify for welfare are able to withdraw cash from ATMs at 32 of 58 tribal casinos and 47 of 90 state-licensed poker rooms. This, coming from a state whose budget deficit is forecasted to breach $21 billion in the next 18 months, does not inspire confidence in California's ability to pull themselves out of their spiraling debt.
Such blatant mismanagement of Californians' tax dollars is characteristic of a state that continues to edge closer and closer to economic ruin. California currently levies the 5th highest top marginal personal income tax rate at 10.55%. With such a high percentage of workers' payrolls going to the government, it is disheartening to see the lack of oversight. In 2009, the California Department of Social Services was budgeted $19.7 billion, and they still couldn't manage to keep their welfare funds from going straight into slot machines. How can such a government propose any new taxes when they can't manage their current funds?
Furthermore, California lawmakers must pass a budget for the upcoming fiscal year by Thursday and yet nothing is being done, and now they are going on vacation! Instead of voluntarily waiving their per diem salaries and staying in session through July, Speaker John Perez is allowing the legislature to go on summer recess, without passing a budget! So what have state lawmakers been doing for the last few weeks while the state budget hung in limbo? Debating the finer points of the state rock. No wonder they didn't have time to notice that taxpayers' money was being squandered in casinos.
In the end, with a little more oversight this could have easily been avoided. California’s $41 billion budget gap is only going to grow if fiscal mismanagement continues. What California needs is to engage in focused, priority-based budgeting and make significant cuts to their already bloated budget in an order to rein in their reckless tax and spend attitude. Between 1999 and 2008, a little over 1.4 million people left the state of California, a number that can only be expected to increase if taxes are raised to generate revenue for more out-of-control spending. What will make Californians very lucky is if the state can balance its budget without resorting to tax increases; but the odds on that bet are not good.