“Don’t chunk off greater than you may chew” is a type of outdated, however legitimate, aphorisms that folks and establishments ignore at their peril.
Most of us know individuals who have taken on extra debt than they will afford or make guarantees to buddies and households that they can't honor, with opposed human penalties.
Companies wind up in chapter court docket once they increase too quickly or misinterpret markets. That typically occurs to governments as properly, such because the three California cities which have gone bankrupt lately by taking up an excessive amount of debt for initiatives and advantages that have been politically engaging however financially unsustainable.
California’s state authorities has been on an expansionist binge of late, because of a torrent of unanticipated tax revenues and immense quantities of federal assist tied to the COVID-19 pandemic.
Scarcely every week passes with out Gov. Gavin Newsom asserting some new program or enlargement of an current program, comparable to extending well being protection to extra undocumented immigrants, growing slots for pre-kindergarten care and schooling, and transferring mentally ailing homeless individuals into therapy and housing.
There may be some monetary danger in these expansions. The state is seeing a surge of revenues now, however its funds are dangerously depending on a relative handful of rich taxpayers and even a gentle downturn might — as we have now typically seen prior to now — shortly result in shortfalls.
The guarantees being made within the expansive providers Newsom and the Legislature are launching increase expectations that might flip to mud if the financial system turns bitter, because it periodically does.
There’s additionally one other side that might backfire even when cash isn't an issue — truly delivering the brand new providers.
Alas, the state’s monitor file on undertaking what it guarantees isn't a great one. The managerial meltdowns on the Division of Motor Automobiles and the Employment Improvement Division attest to that syndrome, as are the state’s quite a few high-technology initiatives which have both failed or change into costly sinkholes.
Capitol politicians tend to enact high-concept “options” to perceived issues with out totally vetting the potential of delivering and even delving into their efficiency after the actual fact.
A chief instance of the syndrome is how California has handled — or did not take care of — its immense homeless inhabitants, a difficulty that ranks very excessive within the public consciousness.
Numerous billions of dollars have been spent on a number of approaches, however indications are that the variety of individuals on the streets has continued to extend.
A yr in the past, the just-retired state auditor, Elaine Howle, issued a extremely crucial report on California’s efforts, saying “its strategy to addressing homelessness is disjointed. At the very least 9 state businesses administer and oversee 41 completely different packages that present funding to mitigate homelessness, but no single entity oversees the state’s efforts or is accountable for growing a statewide strategic plan.”
“In consequence,” Howle instructed the Legislature, “the state continues to lack a complete understanding of its spending to handle homelessness, the precise providers the packages present, or the people who obtain these providers.”
Provided that, one should wonder if any of the brand new packages being rolled out shall be any extra profitable.
How, for example, will the state ship extra pre-kindergarten care and schooling if the Okay-12 system is already many 1000's of academics brief? Will extending Medi-Cal well being care protection to extra individuals make any distinction when current recipients already battle to seek out docs? Will there be sufficient skilled workers to deal with the mentally ailing who can be compelled into therapy beneath Newsom’s “Care Courtroom” plan?
Briefly, is California persevering with to chunk off greater than it could possibly chew?
Dan Walters is a CalMatters columnist.