It’s time for Real Budget Fixes
Well, it’s been just about a week since the Governor came out with his May revision and the commentary hasn’t slowed down one bit. Most of the attention thus far has focused on the "sale" of the lottery and whether that truly is more borrowing or not.
No matter how you look at (borrowing or not borrowing), this one time source of revenue would be used to plug the deficit for up to three years, but wouldn’t solve the long term budget problem. It‘s pretty ironic, since Governor Schwarzenegger came into office with a promise to fix the budget, that the real budget fix will be left for the next Governor.
The most important issue in this budget is the "ongoing structural deficit". Spending on an ongoing basis will continue to outpace revenues, and the estimates are that the ongoing deficit will be between $5-6 billion annually. This does not include the payments that will come due for the unfunded retiree health liabilities, which are likely to add at least another $2 billion or more on an annual basis.
The Governor has proposed a spending limit and a reserve fund, but one of the major issues that continues to be unaddressed is the volatility of our state tax system. The bulk of the State’s general fund revenues are made up of receipts from three different taxes-income tax, sales tax, and the corporate and banking tax. Over the years the income tax has provided an increasing percentage of the general fund revenues and of the three major sources of revenue it is by far and away the most volatile.
Can the Democrats Achieve a Super-Majority Senate or Assembly in November? – UPDATE
Last week I wrote on the odds of the Democratic Party being able to achieve a veto-proof "supermajority" in the Senate or Assembly come November.
This requires the Democrats to pick up two new seats in the Senate and six new seats in the Assembly, while holding on to the seats they currently hold.
I surmised that because no Democrat filed to run against Republican Senator Abel Maldonado in SD15, which the CA Target Book identified as one of only two GOP-held senate seats up this year that are competitive, along with Senate President Pro Tem Don Perata throwing in the towel in the Jeff Denham recall election, that a pickup of two seats was not likely.
But the situation in SD15 did not sit well with local Democratic activists, particularly those on the San Luis Obispo County Democratic Central Committee. They are now backing a write-in campaign for Dennis Morris, described in Calitics, a popular liberal web site, as "a non-politician, a former legal scholar who retired to grow grapes on his vineyard."
If at least 3,700 Democratic voters write-in Morris’ name on the June 3rd primary ballot, his name will appear on the November ballot as the Democratic nominee, which could certainly put this district back in play come November.
Thoughts and Ideas from the CalChamber Business Legislative Summit
Yesterday Morning, I had the opportunity to attend the the California Chamber’s Business Legislative Summit in Sacramento, which featured a panel discussion on the state budget crisis with legislative analyst Elizabeth Hill, the Sacramento Bee’s Dan Weintraub and political strategist Dan Schnur.
The three panelists, all from varying political backgrounds, each brought a number of interesting ideas and perspectives to the table. Below are some of the thoughts, ideas and quotes they put forth which we felt F&HD readers might find particularly interesting. Each are, of course, the opinions of the respective speakers:
Elizabeth Hill
- California can not get out of this budget dilemma just with the lottery – we must reduce spending and increase revenues.
- In reducing spending, we must also try to maintain current service levels.