Californians: Hold on to your wallets!

Californians: Hold on to your wallets!

Gov. Arnold Schwarzenegger and Democrat legislative leaders have come to an agreement on the budget. It involves deep "cuts", borrowing and tax hikes.

The Los Angeles Times reports:

Legislative leaders are scurrying to round up votes for the plan; whether they will get enough by Friday is unclear. Republican lawmakers, in particular, are under tremendous pressure from anti-tax activists to reject the plan.

A copy of the fiscal blueprint obtained by The Times shows that the deficit would be wiped out with $15 billion in cuts; $14.4 billion in new and increased taxes on sales, vehicles, gasoline and personal income; $12 billion in borrowing against future profits from the lottery; short-term loans; and various accounting maneuvers. Some of the cuts and borrowing could ultimately be offset by billions of dollars in federal aid that California would receive in the economic stimulus package that passed the U.S. Senate this week and is awaiting final approval in Congress.

Californians would also take a substantial hit in their wallets.

Vehicle license fees would nearly double, going from the current rate of 0.65% to 1.15% of the value of a car or truck. The sales tax would increase by 1 cent, raising the rate in Los Angeles County to 9.75%. Gasoline taxes would increase by 12 cents a gallon. And Californians would pay a new surcharge on their personal income taxes, amounting to 2.5% of their total tax bills.

It is absolute insanity to increase taxes during any recession. But this recession isn't an ordinary one. If any Republican votes for this, they are good as dead politically.

Talk show host Hugh Hewitt, after hearing the details of this agreement, wrote:

Watch the line form at the door for productive people to pull up stakes. This is nuts. California doesn't deserve government this dim.

UPDATE: States like Colorado, Arizona, Nevada and Utah are now campaigning to get Californians to uproot and move to their states.

From Wall Street Journal.com:

Colorado is the first out of the box with a Valentine-themed banner that will trail behind an airplane circling rush-hour traffic in Los Angeles on Friday morning, urging Californians to give Colorado a try. Ads in newspapers from San Diego to San Jose will feature a Cupid in ski boots over a bold-faced tease: "California, can you feel Colorado's love?"

Right behind Colorado are Arizona, Nevada, Oregon and Utah -- all planning to make similar runs at luring corporate executives, venture capitalists and manufacturers who might be fed up with California's political gridlock or anxious about potential tax hikes and deep cuts to schools, parks and other services.

This is looking more appealing every day!