San Diego Union Tribune Editorial

Government as farce / $7.4 billion debt in state jobless fund is telling


Sunday, November 29, 2009 at midnight

With depressing regularity, stories emerge out of Sacramento that provide explicit proof of the striking incompetence of our state’s leaders. Here’s the back story on the latest.

In the summer of 2001, Democratic lawmakers and then-Gov. Gray Davis were pushing for a four-year, 96 percent increase in maximum unemployment benefits. Republicans strongly objected because they thought the big increase was unjustified and that the higher taxes to be imposed on employers to pay for it would be burdensome.

So what happened? Democrats forced through the benefit hike on a simple majority vote, but the accompanying bill to raise taxes on employers to fund the boost failed to achieve the necessary two-thirds support because of GOP objections.

The sheer stinking dumbness of this gets even worse. In 2002, the state bureaucrats running the jobless benefits program told The Sacramento Bee this wouldn’t be a problem.

Flash-forward seven years. The San Jose Mercury News recently reported that the never-resolved gap created by the unfunded boost in benefits had come back to haunt the state in a huge way. The jobless fund is expected to be $7.4 billion in the red by year’s end and is on track to have an $18.4 billion deficit by the end of 2010, thanks to a 12.5 percent unemployment rate.

The only reason this enormous problem didn’t blow up earlier this year during budget negotiations was because of an interest-free $4.7 billion loan from the federal government. If the loan isn’t repaid in its entirety by 2011, Washington will charge interest on the huge debt.

We’re skeptical that will ever happen, at least if Democrats still control the House and Nancy Pelosi, D-San Francisco, is still speaker. Instead, they’ll just print more money and continue adding to the national debt in obscene fashion.

But at some point, we can expect to see a coordinated push for massive new taxes on state employers to fund the benefits. If these taxes add a crushing new burden on business that keeps unemployment sky-high, so be it. We’re sure that some state bureaucrats somewhere will pop up to assure us this won’t be a problem.

Call this what it is: government as farce.

Nevertheless, despite the frequency with which we see such stories, the Sacramento political and media establishment remains resolute in its belief that the real problem with California is Californians – you know, the numskull voters who demand services but balk at paying for them.

As if voters wanted state employees to be among the highest paid in the nation with pension benefits most Californians would die for. As if voters wanted the number of workers paid by the state to increase by nearly 25 percent since 1997. As if voters wanted the state government to do something as apocalyptically stupid as increasing unemployment benefits by 96 percent without funding the gigantic increase.

The blame for all these brilliant decisions falls on state leaders and state leaders alone.

http://www.signonsandiego.com/news/2009 ... bless-fun/