As the influence of public unions increased, we moved to our present situation where prison guards in California earn six figures and eye-popping retirement packages are the norm. The result is a rather Greek-like combination of generous public spending and low tax receipts with massive bond sales to make up the difference.

At least California has Google, Apple and wonderful and productive agriculture. Under higher taxes the farms at least would have to stay put.

Business would benefit because it would make States more competitive between each other and reduce the power of Washington, which is what I understand a lot of US folk want. But I guess it would also mean fewer toys for the military, fewer pork bellies for the politicians, and fewer easy contracts for one or two military suppliers so I can’t ever see it happening. Shame though, imagine taxes going down and local services improving! That’s how it works in Switzerland.

When looking at california entities to find an example of budgets which rely on state revenue, which received a significant amount of the one time federal grants, I think school districts is an apt example. One time federal grant receipts were only minorly replaced by an increase in state revenues. There were many steps taken to replace the missing funds that were temporarily replaced by federal grants. States lowered requirements of students per classroom to receive state funding allowing teachers to be laid off and schools consolidated, state revenues previously restricted for items such as art classes, mentally disabled, and other items were reclassified as unrestricted so as to be able to be used for general budget purposes as well as many other steps. In the end California has not replaced the revenue, but done a mixture of necessary cost cutting, one time boosts or delays of payments, and shady accounting to pass budgets.