We should all applaud Gov. Arnold Schwarzenegger’s stark honesty about the disastrous condition of California’s finances in his State of the State address Tuesday. The budget deficit currently being run by the state is $14 billion and, with the recent revelation that another $118 billion will have to be found over the next 30 years to cover guaranteed health benefits for retirees, this number is only poised to increase for the foreseeable future. The Governator is expected to declare the state to be in a state of Fiscal Emergency later this week, and has already proposed dealing with the economic disaster by releasing tens of thousands of prisoners early.
In his State of the State address, Schwarzenegger commendably spoke of responsibly reacting to the budget crisis by committing “to permanently rein in spending” and “not to raise taxes."
Unfortunately, his continued pursuit of the poorly-titled "Health Care Security and Cost Reduction Act" gives the lie to those promises.
In pushing this legislative attempt to give government more control over the state’s health care apparatus, Schwarzenegger is still advocating billions of dollars in tax increases. These tax increases on hospitals, business payrolls, and tobacco will impose even greater financial hardship on working Californians, and will not result in appreciable improvement in the health care and health insurance markets.
Schwarzenegger should follow his own promises not to raise taxes, and should seek courses of action that can effectively combat California’s fiscal and health care crises. Fighting wasteful government spending and opening up the health care market to more competition and less regulation would be a good start.
Jeff Emanuel is Research Fellow for Health Care policy at The Heartland Institute and is managing editor of Health Care News.