Commentary: California's mountain of debt

What, one might ask, is the appropriate metaphor for California's convoluted budgetary situation?

Would be it be Enron, which cooked its books to fool investors and lenders? Perhaps a Third World country whose rulers run up a mountain of debt while squandering revenues? Or both?

Whatever it may be, years of irresponsibility by politicians and voters alike have left California with ongoing spending obligations that are nearly 50 percent higher than its ongoing revenues — roughly $110 billion a year in the former and $75 billion in the latter – and debts that would be daunting even were the economy to improve dramatically.

Gov. Arnold Schwarzenegger and legislators have narrowed the structural budget gap in the short run with temporary taxes, temporary spending cuts, up-front and backdoor loans, projected asset sales, bookkeeping tricks and raids on local governments, but will probably see major deficits appear again soon.

The debts — many billions borrowed to keep the state afloat, spending deferrals that must be honored later, bonds issued to finance public works, and unfunded liabilities in public worker pensions and health care — are continuing to pile up.

The Legislature's budget analyst, Mac Taylor, has gathered the various debts into one document at the request of Fresno Assemblyman Juan Arambula, who left the Democratic Party this year as a protest against what he saw as mounting fiscal irresponsibility. And it is, or should be, a frightening compilation.

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