California is a garden of Eden, a paradise to live in or see;
But believe it or not, you won't find it so hot
If you ain't got the do re mi.
If you ain't got the do re mi.
Just a few months ago, the California economy appeared to be in great shape. Governor Gavin Newsom predicted a $7 billion budget surplus for 2020, and the state had $16 billion in its rainy day fund.
The governor was feeling so confident that he promised to distribute $75 million to the state's illegal residents. Very thoughtful. But after all, what's $75 million to California, the world's fifth-largest economy?
But then COVID-19 came along like a drunken ex-spouse at your wedding reception, and the Golden State's economy began heading south.
Today, Governor Newsom projects a $54 billion budget deficit--more than three times the amount of the state's rainy day fund. California has 4.2 million unemployed workers and huge healthcare expenses connected with the coronavirus. One in three Californians (13 million) are on Medicaid and can't pay their own medical bills.
And of course, California's financial problems are more severe than this year's budget deficit. According to the California Policy Center,California's state and local liabilities total $1.5 trillion.
A lot of California's debt can be traced to high salaries paid to the state's civil servants and unfunded pension obligations to government workers. California's public employees (professors, school administrators, hospital administrators, etc.) are paid well. In fact, about one-third of a million government employees draw salaries of $100,000 or more. Over 1,400 of them are paid more than Governor Newsom.
California's state and local employees also enjoy great retirement plans. Some retired school administrators draw pensions of more than $300,000 a year.
California desperately needs a federal bailout to keep essential services going and to pay thousands of overpaid public workers. Indeed, Governor Newsom said he is optimistic about the state's economic future but, "My optimism is conditioned on this--more federal support."
Hence, Nancy Pelosi's $3 trillion HEROES Act, which, if passed, will shower more than $1 trillion of federal money to distressed state and local governments. If the Senate votes to approve Pelosi's bill, lots of federal money will arrive in California.
But there's just one problem with the HEROES Act. The national debt already tops $25 trillion. Pelosi's legislation will add another $3 trillion to that number.
So if the federal government bails out California, taxpayers in Kansas, Ohio, and Oklahoma will help pay the tab for those quarter-of-a-million dollar California pension benefits. The citizens of the Midwest will help fund the princely salaries of California's college professors and school superintendents.
As Woodie Guthrie observed nearly 100 years ago, California is a garden of Eden and a beautiful place to call home. But the state's dwindling middle class is going to find that California is not so hot if you ain't got the do re mi to pay for a whole lot of high living by people who call themselves public servants.