Dan Walters: State Still Owes One Huge Debt
California got into this pickle because in 2001, when the UIF had a $6.5 billion reserve, the Legislature and then-Gov. Gray Davis decided to boost benefits sharply – nearly doubling them, in fact – without raising payroll taxes to pay for them. The extra benefits reduced the fund balance, leaving it unable to cope with sharp increases in claims for benefits when recession hit the state six years later. It was irresponsible, akin to the big increases in public employee pensions that Davis and legislators also decreed without a plan to pay for them, which also has created a big debt.