The LA Times offers up the story of the rise and fall of the California budget surplus.

The gist of the story is that California historically relied on upper income earners to pay the lions share of state income taxes.

An analysis of state tax returns for the year 2000 shows that the 10% of California taxpayers who have an adjusted gross income of $100,000 or more paid 78% of all the state's income taxes. And just 1% of wealthy Californians account for 48.7% of the state's personal income tax revenue.

When those upper income earners cashed in on the stock market, and stock options, Sacramento had an 'avalanche of money'. California Democrats and Republicans alike increased state spending at a record pace, despite warnings that the stock market boom wouldn't last forever.

Well, it didn't. California's income tax receipts fell from a high of around $45 Billion in 2000, to an estimated $33 Billion in 2002. Still, that only accounts for a fraction of the almost $35 Billion budget deficit.

So what is Gray Davis' answer? While he is cutting some programs, he intends to increase state revenues by increasing taxes across the board. Cigarette taxes, income taxes, motor vehicle taxes, sales taxes, and taxes on Indian reservation gambling are just a few of the new ways California will tax it's citizens. So, what is the message here?

Quite simply, private individuals and corporations will have to bear the brunt of the shortsightedness of California's lawmakers. What it comes down to, is that California wasn't fiscally responsible. They spent every penny that came in, and then when the flow of money slows down, they use the threat of lethal force to go out and collect more.

Now, when private individuals or businesses experience a decrease in income, they don't have that option. Sure, they can try taking money by force, but they are likely to end up in prison. Instead, most people cut their budget and look for ways to increase revenue. (ie: second job, going back to school, etc)

Not the government. They simply seize the money they need. At the same time, this stifles economic growth and ensures they'll have just as tough of a time meeting their budget needs next year. Also, as the 'rich' (and the jobs that go with them) move out of California, the problem will only get worse; and those that are left behind are really screwed.