Here is another reason why state governments — like the federal government and local governments — ought to be run responsibly and within their means: Gov. Arnold Schwarzenegger of California has ordered that 200,000 state workers’ salaries be cut to the federal minimum wage of $7.25 per hour.
Why? Because California legislators have failed to take the tough actions necessary to close a $19 billion state budget deficit, and the money just isn’t there.
To put the governor’s order in perspective, the typical state employee in California earns about $65,000 per year. The reduced pay would leave the workers earning about $15,000 a year. That’s undoubtedly a frightening prospect to those hundreds of thousands of workers, though legal maneuvering has stalled the governor’s order as of this writing.
But why has Gov. Schwarzenegger been forced to take such drastic measures in the first place? Because like our federal government, California has refused, year after year, to make even the most basic attempts to live within its means. It has embraced every costly environmental fad that has come along, artificially inflating energy costs. It also has piled one business tax on top of another. That has, among other things, destroyed California’s auto industry. The “Golden State” went from eight car-manufacturing plants 20 years ago to none early this year.
Those policies have devastated the tax base and slashed tax revenue for the state, leading to its current financial nightmare. How bad have things gotten? Well, California has even had to consider ending some “safety-net” programs altogether and sharply reducing spending on programs that provide care to the elderly and disabled.
Shouldn’t all states — and most especially our big-spending federal government — avoid similar catastrophes by reducing ineffective, wasteful government spending and focusing on free-market economic policies that actually have a chance to promote growth and sustain legitimate government programs?