It has been all in the news lately about California’s huge budget problems.  It boggles the mind that any state can get billions of dollars in debt, though California isn’t the only state with this problem.  To solve this problem, the legislation of the state has decided that increasing taxes and laying off workers is the only way.  Now, I agree that you will probably have to raise taxes (though I would have thought California would have other means of revenue available), but laying off state workers (on top of the ones already furloughed and laid off) is more of a shoot yourself in the foot move. Point in fact…

• State workers in general tend to be the smallest part of the budget, most (the ones most likely to be let go) are low income.  Yes, you save some money instantly, but not a great deal, unless you lay off the big paycheck people (not likely).
• Some of these people have skill sets that are essential and will be hard to replace once the budget crisis is over.  Government services that are still left will suffer.
• These laid off workers will be joining the other laid off workers on unemployment and on state welfare.  You will have even more children on the state insurance.  All of this will increase the money needed from the government.
• All those with homes and outstanding debts will be defaulting on their loans added to the problems of the economic crisis.

I don’t have any answers, but it seems that no or little thought has been put into solving the budget crisis in California.

UPDATE: Bizarre ideas seems to be rampant these days.  Georgia has been having budget problems as well (a shortfall and not an actual debt since by the state constitution the budget has to be balanced with projected revenue) with cuts across the board with some lay offs by a few universities.  Now that the legislature has just recently manage to keep the budget in range of the law, some Republicans are now advancing their own “economic stimulus” package of their own with tax cuts for businesses and corporations.  How are they going to pay for the tax cuts?  Lay off state workers.  I know for a fact that state workers in Georgia (teachers included) are severely underpaid.  And what is one of the main tax breaks?  A tax break for hiring people who have been unemployed for at least 60 days.

I see where this is heading, you hire someone (maybe a laid off state worker) who has been out of work for sixty days, employ the person for the minimum time, and then lay them off getting the tax break in the process.  One hell of a scam in the making if you are not careful with the wording on the legislation.

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