California Legislators Got Drunk on Stock Market Gains -- Seeking Alpha:
"I've been studying California's budget. From 1998 to 2009, California added over 80,000 full-time government employees. That means future taxpayers must pay for an additional 80,000+ pensions, lifetime medical benefits, and annual salaries. However, adding 80,000 more government employees is not the major problem, as long as we reform their generous long-term benefits.
The biggest problem is that starting in 1999, California's legislators assumed revenue/tax numbers based on stock market gains/sales and spent accordingly. From 1998 to 2000, spending jumped dramatically, but from 1999 to 2008, expenditures declined only once--when the tech bubble popped, in 2003/2004. Basically, it seems our legislators banked on an ever-increasing stock market to finance spending. Oops."
"I've been studying California's budget. From 1998 to 2009, California added over 80,000 full-time government employees. That means future taxpayers must pay for an additional 80,000+ pensions, lifetime medical benefits, and annual salaries. However, adding 80,000 more government employees is not the major problem, as long as we reform their generous long-term benefits.
The biggest problem is that starting in 1999, California's legislators assumed revenue/tax numbers based on stock market gains/sales and spent accordingly. From 1998 to 2000, spending jumped dramatically, but from 1999 to 2008, expenditures declined only once--when the tech bubble popped, in 2003/2004. Basically, it seems our legislators banked on an ever-increasing stock market to finance spending. Oops."
