The budget deal agreed to by Governor Arnold Schwarzenegger and legislative leaders is better than the budget the legislature sent to the governor earlier in the week, but it does not come close to fixing California’s dysfunctional fiscal system.
The idea of borrowing from the taxpayers with a no-interest loan by increasing withholding was eliminated. That’s a good thing. And, the rainy day fund provision was strengthened while the size of that fund was reduced. That works, too.
But, whether other aspects of the deal—collecting larger penalties from corporations that underpay their taxes, and voters approving a plan on loans from an expanded lottery – will secure the needed revenue to balance the budget are iffy at best.
On top of that, the main budget problem remains: once again the state is projected to spend more in the next budget year than it brings in. While some think they can take a breather from state budget thoughts now that this budget is put to bed, others are plotting otherwise.
Think tanks and good government groups will steam ahead trying to cook up agreeable solutions to the budget process, and hope to bring warring sides together over a solution.
Partisans and special interests will hunker down in some back rooms mapping out initiatives to turn the constitution and the budget process to their advantage.
The governor and his department of finance will start working on next year’s budget — hey it ‘s due in January, that’s not so far off — they need to figure out how they will fill the projected budget hole that this year’s effort invited. We’re about to get knocked for a loop again and some claim they didn’t see it coming. Come on, we’ve been down this street before.
Perhaps there is some potential for change with the proposed tax structure commission that Assembly Speaker Karen Bass plans to convene if the commissioners take an honest look at state spending as well. Speaker Bass seems to focus on revenue enhancement. Revenues can increase if we create a fairer tax system and a friendly business environment. If the spending side of the budget equation is ignored, the commission will get us nowhere.
Budgetmania has become a year round obsession in Sacramento.