EDITORIAL: Rolling in money but still drowning in red ink

To hear many Democrats explain it, the nation has racked up $37 trillion in debt, not because Congress can’t control spending, but because the taxman doesn’t confiscate enough money from hard-working Americans, particularly those with comfortable incomes.

Perhaps they should take a look at the progressive nirvana we call California.

Nevada’s western neighbor should be swimming in revenue. In the past five months, Sacramento’s coffers raked in $6 billion more than projected, in large part thanks to the ongoing artificial-intelligence boom in Silicon Valley.

Yet the California budget is hemorrhaging. CalMatters reports that the state faces a deficit of $18 billion in the new fiscal year, and the red ink is projected to grow as high as $35 billion by fiscal 2027-28. All this because outlays are gobbling up the healthy revenue growth. In other words, California — like the federal government — has a spending problem.

“The state must assess the effectiveness and sustainability of the programs that were created during the surplus and make necessary corrections,” state Sen. Roger Niello, the GOP vice chair of the Senate Budget Committee, said in a statement, according to CalMatters.

State Democrats and Gov. Gavin Newsom blame President Donald Trump for their problems, of course. They cite efforts by the White House and congressional Republicans to force states to share more of the financial burden for health care and housing programs. They might have a case if California’s budget woes didn’t predate Mr. Trump’s second administration.

“Even before Trump retook office,” CalMatters reports, “California already faced a structural money problem, in part due to the state’s heavy reliance on wealthy earners’ income tax and capital gains, which rise and fall with the stock market.”

Translation: The California budget is already highly dependent on soaking the state’s wealthiest taxpayers, yet that has exacerbated the state’s problems rather than solved them. In fact, rather than control their spending addiction. Democrats in the state’s legislature have in recent years relied on various one-shot budget gimmicks to slap a Band-Aid on the oozing wound. They were even forced to re-think plans to provide taxpayer-funded health care for those in the state illegally. The horror!

In the meantime, leftist special interests in California propose a version of the “wealth” tax on billionaires as a means of stabilizing the budget. If passed, it will be an utter failure, driving more productive citizens from the state and dragging down economic growth.

Rather than an endless obsession with more revenue, Democrats in Washington and Sacramento who believe in fiscal sanity — if there are any left — must focus on the other side of the equation.