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U.S. States Facing Budget Crises: Why Balanced Budget Laws Aren't Working

This week there have been numerous headlines with respect to the budget crises now facing most of the states throughout the United States, again with the downward spiraling U.S. economy to blame.

Mr. Obama, of course, recently participated in one of the most massive layoffs and firings of the current employees for General Motors, of course consoling them with how their "sacrifices" now would reap benefits down the road. The question is, of course, for whom?

Apparently U.S.A., Inc. and the United Auto Workers, who were given an ownership share in the deal brokered by the Obama Administration in order to add this major U.S. corporation to Washington's budgeoning stock portfolio.

I'm sure that acquisition has set Detroit and Michigan's economy back a bit insofar as sales tax revenues.  Most of those autoworkers most likely will be eating pork and beans for a while, "sacrificing" for Mr. Obama's now Government Motors.  And those bond holder owners just lost a little of that retirement money for those planned road trips in their golden years.

But China picked up a steal, or should I say, steal for its steel.

Now, even after receiving "kickbacks" in the form of federal funding through the stimulus packages of billions of dollars which are to be transferred to the states and billed to the state citizens and taxpayers as a whole, the states are now still whining about their shortfalls.

And the biggest whinner, of course, is that liberally run Golden State, defined by its excess over the course of years and the high taxes and destruction which has resulted due to their own liberalism.

It doesn't appear those in state office have been able to read the California Constitution for at least fifty years if not longer, since the early 60's.

I guess the costs of their open borders, pro-illegal immigrant positions, and past "save the trees" environmentalism that has since resulted in the destruction of thousands of homes and forested acres is finally coming home to roost.   Costs for which the entire nation also has paid for during those self-created disasters in their misguided environmental radicalism during a ten year drought with overgrown forests which can now be set off by static electricity in more than a few areas and almost non-existent groundwater tables.  Of course the fountains and jacuzzis are still humming along nicely.

And both Gray Davis and Arnold Schwartzenegger's freewheeling ways.

The OC set have never heard the word "fiscal conservatism," a term they associate with "right wing extremists," and Kansas farmers (who they would like to bail them out) when it comes to their creature comforts, limos, jacuzzis and their private jets which they cannot do without so that they can attend their next global warming lecture.

My former home state, Arizona, is also facing a crisis, or so it has been reported, even though many years ago the citizens in that state actually passed a "balanced budget" initiative.

Has it worked? Hardly.

You see, the government is the worst when it comes to following the laws and directives of "we the people." Our taxes fund literally hundreds of lawyers to advise legislators on just how they can skirt around some of those initiatives in order to continue doing business as usual.

When those budgets are released to the public, you need a magnifying glass and organizational chart to follow the money trail to find where all the funding is actually going. And even with those tools, you would only get half the picture.

Nowhere in those budgets are reported the sums that are received also from the federal government in order to fund some of these state programs. Thus, citizens in most states face dual taxation in numerous areas at both the state and federal levels.

It has gotten so bad in Arizona that they have sold former state funded prisons and/or are now contracting for local prisons and guards privatizing them, and are now charging the prisoners for their accomodations in order to make those lease payments, and giving incentives to officers on those federally funded DUI sports bar patrols in order to meet the federal grant guidelines to make those payments, which sums now are far more than the prior costs of upkeep and maintenance of some of those facilities for state taxpayers.

Most state and local impound lots also throughout the country have been privatized, many of which are owned by police officers as a further incentive in the new social drinking taxes.

Apparently, the state needed the money from the prison sale in order to assist in funding one of the state's new pet projects and new foundation under Janet Napolitano, the high tech gadget junkie, The Arizona Science Foundation.

Were the citizens consulted in this new project?

Of course not.

The state then subsequently entered into multi-year contracts with this organization (contracts with itself), which foundation is now suing the State of Arizona (again themselves or the state citizens ultimately) in order to get the funding through the backdoor, since in order to "balance" this years budget funding had to be reduced to this extra-Constitutional foundation for the press release of a "balanced" budget.

A new legal trick has now been the modus operandi in order to satisfy the state budget requirements, in now simply using the courts in order to fund some of these state created foundations and then hide all the extra revenue they are doling out for state agenda driven projects outside Constitutional authority or citizen accountability.

Then, of course, the state can appear to be "balancing" the budget while the courts and taxpayer paid "foundation" and private corporate attorneys negotiate and "seal the deals" factoring in, of course, their cut also in acting as the go-betweens of the state now in these NGO and extra-Constitutional funding matters.

Look hard, Californians, at that budget, and the court actions which have occurred in your state throughout the years.

I'm sure you'll find that there is plenty of money and there is no "budget" crisis, its just a matter of the state's priorities and legislators extra-Constitutional commitments that are the real problem.

And committing taxpayer sums and entering into contracts with either private or state created "foundation" contractors for multi-year terms in the first place, when state budgets in many states are required to be balanced annually.

To put it simply, deciding to fully fund and fulfill that multi-year contract for the newest "foundation" or multi-plex for the global visitors to Sacramento means the sums needed for vital services for which those tax monies are "legally" required such as the street repairs and garbage collection might just need to be cut, or reduced in order to "balance the budget."

Or in order to quell the masses, provide those sums in order to comply with the law, and then instruct extra-Constitutional "contractees" and developer instead to sue the State of California for their money, so that after the funds are provided and the lawsuit "settled," there is then a carry-over budget crisis and deficit again next year.

Balanced budget requirements are sort of like a shell game, with simply more and more "shells" (or shills) added each year.

That's what "liberalism" and legislating according to "living"  Constitution beliefs actually does, encourages "corporate" socialism ultimately in taking from the poor (citizens) and give to the rich (foundations, corporations, developers), while the garbage piles up.
 

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The SkyRocketing Costs Of Higher Education

Now that graduation season is upon us, higher education has been in the news quite a bit in the United States this past month.

Due to the economic conditions now claimed by most states in the United States due to the mortgage meltdown, bank bailouts, continuing conflict in the Middle East, automakers bailouts, health care crisis, and Wall Street's bear market (many of these situations, of course, are due to governmental negligence and precipitated crises) many of the major universities throughout the nation are now announcing increases for tuition rates for most of the public and private college universities.

Interestingly, these increases are now being announced even after there was considerable funding in the form of grants to a great many of these universities for infrastructure needs, and increases in federal grant monies for tuition costs included within that enormous simulus packaged passed by the Obama Administration several months ago.

As an example, the tuition rate increase announced for one of the major universities in my former home state, Arizona, will be the second increase within the past two years, and will place the average in-state resident tuition now at over $6,275 per semester for incoming new freshman for the 2009-2010 academic year at Arizona State University.  Included will be new fees in the form of "surcharges" also tacked on to those tuition rates.

Although there is a provision within Arizona's own Constitution that provides the parameters for university tuition which can be charged state residents:

Admission of students of both sexes to state educational institutions; tuition; common school system

Section 6. The university and all other state educational institutions shall be open to students of both sexes, and the instruction furnished shall be as nearly free as possible. 

The problem there as in most states is priority of expenditures, and using public funds for private and extra-Constitutional contracts in public/private partnerships and functions most of all.

This amount may sound reasonable when compared to the rate charged at most private universities, or even some of the public East or West coast universities; however, most tuition rates are set by Boards of Regents which are unaccountable to the taxpayers for those tuition rate increases, and simply apply to the state legislature through approvals given by these Board of Regents for their requests.  And would dispute with respect to Arizona's clear Constitutional provisions, that $6,250 per semester is "as nearly free as possible."

As someone who grew up in that state, I compared the rates charged when I graduated from high school, to the new rates in comparison factoring in inflation according to the tables provided by an online inflation calculator source. 

Since I also am aware of a recent backdoor tax levied and was subject to in the form of an added property tax prior to moving from that state for the expansion of that university and the construction costs for same at the municipal level (thus triple taxation at the municipal, state and federal levels in support of that university), and also aware of the sums in grant monies provided under the stimulus, I did not factor in any added "construction" costs which might also be included in the university's budgets.

Besides, more than 2/3rds the building within the Arizona State University campus are less than 20 years old.

In 1970 the rate for tuition for in state residents was $320.00 for 16 credit hours each semester.  As referenced above, the rate for the 2009-2010 academic year will be $12,550.

 What cost $320.00 in 1970 would cost $1755.48 in 2008.

Rate charged at ASU 2009-2010:  $12,550 - more than ten  times the amount of inflation.

And the standard of living (not to mention quality of life) was higher in 1970 even during that recessionary period, than it actually is today.

Also interesting and as a side note, the President of the University was also recently granted a salary increase bringing his salary as a public employee to over $750,000 not including state benefits such as health care, expense accounts, dental insurance and pension plan.  That salary of three quarter of a million dollars exceeds the salary of the President of the United States.

His wife is also employed by the university at a salary of over $160,000 per year.

None of the sums received in direct federal grant monies are included in the budgetary requests made at the state level in most states throughout the nation.

And in 1970, free tuition waivers and costs were given to the top 10% of all graduating seniors from Arizona state high schools in recognition of the "public" support of the Arizona citizens to that university.

Now the criteria for any and all tuition fee waivers requires graduating in the top 5%, and exceeding a state mandated AIMS (Arizona Instructional Measurement System) test which a good percentage of the high school faculty themselves had difficulty passing prior to its being given to the high school students.  And which cost the Arizona taxpayers over 10 million to prepare, since the Iowa Test of Basic Skills or the SAT's themselves were not sufficient as testing methods for measuring instructional goals for outgoing seniors.

And did I mention that the revenue from the sales of tickets and memorabilia, network contracts, and local radio and television broadcast revenues received by the Arizona State University football program, and private alumni grant monies also go unreported in those budgetary requests?

While the selection committee focuses on primarily out state national merit scholars for name recognition, and illegal immigrant and foreigners for federal grant monies in order to also profit at the Arizona and American citizen's expenses.

If you would like to do a historic comparison for inflationary purposes on your state universities tuition increases throughout the past three decades, you can find the relevant table at:

http://www.westegg.com/inflation/

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