To paraphrase Yogi Berra, "It’s déjà vu all over again". It was just a little over four years ago, in March 2004, that the legislature placed on the ballot and the voters approved Propositions 57 and 58. Proposition 57 authorized $15 billion in bond financing for the deficit at that time and Proposition 58 was supposed to end deficit spending "forever".
But here we are today, again faced with a budget deficit of at least $15 billion. Many in the legislature during the budget debate two years ago warned that the housing market was going to bust, the economy was going to slow, and that state revenues were going to drop. In fact, clearly prescient predictions of $15-20 billion deficits were made, but little attention was paid to the warnings. This year’s budget deficit should not have been a surprise to anyone.
In a bit of irony, the Governor is once again proposing $15 billion in borrowing by securitizing future income from the State Lottery and other one time fixes. These one time fixes are just a continuation of business as usual for Sacramento and are certainly not the needed fundamental fixes to the budget’s structural gap between revenues and spending.
It is time for the Governor and the Legislature to get our State’s fiscal house in order. One time fixes and accounting "gimmicks" are no longer going to suffice for our State’s future, and it is time for our leaders in Sacramento to face the fiscal reckoning and tackle the difficult issues.
Long term budget reform, reform of our State’s tax system, public employee pension reform, business reforms, and infrastructure investment should all be on the agenda for the upcoming budget debate.