AP: California Faces Imminent Insolvency; Immigration Not a Factor
May 24, 2009, 10:37 PM
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According to Associated Press reporter Judy Lin, the State of California is running a projected deficit of $24.3 billion deficit for the current fiscal year, �roughly 25 percent of the state`s general fund�—but immigration does not factor into it.

Lin quotes state Controller John Chiang arguing for the necessity of unspecified, �immediate and real fixes� to balance the once-golden state’s books, but nowhere in her 521-word article do the words �immigration� or �immigrants� appear.

�Failure to balance the state`s books quickly will trigger a financial storm much greater than the one the state endured this past winter, when it stopped infrastructure projects and delayed payments to vendors and refunds for taxpayers, state Controller John Chiang told lawmakers at a budget hearing Friday.

�No matter how bad you thought February was, without immediate and real fixes to the state`s finances, sometime next year we will have a cash crisis that is four times as broad as what it would have been this fiscal year,’ he said.

Based on April 15 tax collections, Chiang said the state`s treasury will be $2.1 billion in the red in July. The projection does not include the rejection during Tuesday`s special election of five budget-related measures, which increased the deficit by $6 billion. It also does not include billions of dollars the state has borrowed from internal funds and must repay.

Chiang urged state lawmakers to pass a budget by their June 15 constitutional deadline. If they don`t act quickly to cut spending or raise revenue, Chiang said the deficit will hit $14.3 billion by December.

It is projected to be $24.3 billion for the entire fiscal year.

Illustrating how quickly revenue has dropped, the state Board of Equalization on Friday cut quarterly sales tax payments to local governments by $122.8 million. The total is nearly 20 percent less than what they had anticipated to hand out….

Gov. Arnold Schwarzenegger`s finance department had estimated sales tax collection would drop 7.4 percent, but actual receipts for the first quarter were down more than 18 percent.

�Prior to this year, we haven`t seen this type of broad-scale reduction statewide,’ said Anita Gore, a spokeswoman for the Board of Equalization.

It`s too early to tell what effect the state`s temporary 1 cent sales tax increase will have since it took effect April 1. Schwarzenegger and lawmakers agreed to the two-year hike as part of a February compromise.

They also raised the state`s personal income tax rate and vehicle license fee….

Schwarzenegger issued a revised budget proposal last week that called for laying off 5,000 state employees….

Chiang said the deficit is only part of the state`s financial problems. It also owes payments on the borrowing lawmakers have used to make ends meet.

It`s been nearly two years since California has had more money coming in to its treasury than it pays out, he said.

[California could run out of cash in 2 months by Judy Lin, Associated Press/San Jose Mercury News, May 22, 2009.]

Lin’s article is textbook hard news, with no editorializing, not even through proxies, and yet it is of little value. The reader is given no explanation of how on earth the nation’s most populace state, once a middle-class Mecca, landed on the brink of financial collapse, nor is he told that the state’s budget deficit has tripled in one year. Thus is the reader left mystified, rather than enlightened.

The answers to the mystery, reported in excruciating detail over the past nine years by VDARE.com, are that:

 

1. California’s rise, since 1980, from 24 million to 37 million residents, has been entirely immigration-driven. During the same period, millions of native-born Americans have fled the state;

2. In a report two years ago, Philip J. Romero, who had been economic advisor to California Gov. Pete Wilson, determined that �The average illegal immigrant receives $8-to-$12 in public services for every $1 they pay in taxes. Annually, this amounts to a special �tax� on legal Californians of tens of billions of dollars—perhaps totaling 20 percent of the entire state budget.� (Summary by The Social Contract’s Wayne Lutton);

3. In his report, Romero estimated illegal immigrants ate from $9.6 billion-$38.2 billion out of the state tax base annually. If we split the difference between Romero’s low-ball and high-ball numbers, we get $23.9 billion. Adjust that two-year-old figure for inflation, and the projected budget deficit is erased entirely, with �tip money� to spare;

4. Legal immigrants are also net tax eaters, rather than net taxpayers;

5. In 1994, California voters overwhelmingly passed Prop. 187, which was then illegally sandbagged by liberal United States District Judge Mariana R. Pfaelzer and killed by Gov. Gray Davis;

6. The state’s fiscal problems derive from its illegal policy of offering sanctuary to criminal foreign invaders, and will never be solved, or even limited, as long as that policy is not reversed. In April 2008, economist-statistician Ed Rubenstein, wrote in his VDARE column, �Inescapable conclusion: Deport California’s illegal immigrants and the current $8 billion budget shortfall would become a $13 billion budget surplus.�

�Diversity� dictates that one never identify the central facts of public life, thus ensuring that problems become insoluble crises, and that public policy debate be replaced with a combination of silence, euphemisms, non sequiturs, outright lies and race-baiting. With Gov. Arnold Schwarzenegger denying, even as a lame duck, that immigration has anything to do with California’s budget woes, the state’s economic collapse is inevitable.