Budget buster

Government | The high cost of education is behind California crisis | David Bahnsen

Associated Press / Rich Pedronecci

The basic facts of California's budget fiasco are mostly well-known: The state has a $26 billion budget deficit, and the revenue-raising ballot initiatives that Gov. Arnold Schwarzenegger and the state's left-wing legislature sent to the voters were soundly defeated in May.

Those initiatives would have raised taxes by $16 billion over four years in a state that already boasts a top income tax rate of 10.3 percent, the highest in the nation.

California's general budget was $76 billion in 2004, and grew to $103 billion in 2008—a 35 percent budget hike that continued its trajectory even as tax revenues have now dropped below $88 billion due to the weakening economy. Some in the Golden State are crying "déjà vu all over again": A similar drop in tax revenue shocked the state legislature during the technology bust of 2000-2002.