California Dreaming

California's state government is in budget crisis, facing a $42 billion budget deficit. The deficit is driven by a spending explosion in the past 10 years.

The state spent $68.5 billion in fiscal 1997-1998, which ballooned to $144.8 billion in fiscal 2007-2008. If the state had adopted an important budget reform, which limits the growth in state spending to the increase in population and inflation, then California would have a budget surplus today - even with declining tax revenues due to the recession.

This spending explosion, along with the Democrats' desire to raise California's already high taxes to resolve the budget crisis, helps the state deserve the nickname the "People's Republic of California".