The Mercury News on Saturday printed a very detailed article on the California budget. The article can be found here, but unfortunately there are some great graphs that are not on the website.

The most telling graph is one with two lines measuring expenditures and revenues from 1995 until now.

Both lines on the graph start out in 1995 at about $55 billion. Then revenues rise slowly over the years, and spending tracks it EXACTLY. Each new dollar that goes into the treasury somehow finds something to get spent on. When Davis takes office in 1999, both lines are still almost dead even, at about $75 billion. In 2000, revenues exceed expenditures, finally, and there is a surplus. But the revenue line flattens out, not rising at all until 2001. Unfortunately, the spending line never changes slope, and rises steadily, topping out at about $105 billion in 2002, while the revenue line, although now rising slowly again, lags way behind at about $93 billion (all numbers are estimates from the graph). Bingo. Deficit.

The question I want to ask is what happened to California between 1995 and now that somehow demanded increasing the annual budget by almost 55 billion dollars. While the previous governor didn't spend as freely as Davis, he is hardly blameless, accounting for about 20 billion of the total. Davis added 34,000 state workers to the payroll. To do WHAT? What were they doing that wasn't getting done before? Energy may have accounted for some of the recent rises, but prices were almost dead flat until the summer of 2000.

The state population went up since 1995 by about ten percent. Spending almost doubled in that same time period. Where the hell is all this money going? I don't have any clear answers, any more than I can figure out how our Federal government is managing to spend twice what it did in constant dollars in 1974. There must be an enormous number of ratholes out there, and well-disguised ones.

It is very hard not to draw the conclusion that some of this spending is not essential, and may even be...gasp...wasted. Some people certainly think so.

The other interesting graph shows how the capital gains tax pretty much created the surplus, rising from about $20 billion a year in 1995 to a height of $120 billion in 2000, before dropping to about $40 billion now.

To give Davis a small amount of credit, while he's hiking taxes he's at least cutting some of the budget. Naturally, every nickel cut off the budget is treated like someone just slashed an artery, despite the fact that less than a decade ago we were all doing just fine and dandy on about half the money.