Finally, a Little Good News on the State Budget

John Wildermuth
Journalist and Political Commentator

For the glass-half-full crowd, there is a bit of good budget news coming out of Sacramento.

Buried in the red meat for the party faithful about raiding the planned budget reserve to save welfare, college scholarships and children’s health insurance, Darrell Steinberg, the Democratic leader in the state Senate, also said his caucus is willing to go along with $13 billion of the budget cuts proposed by Gov. Arnold Schwarzenegger.

When you add that to the governor’s $8 billion in smoke and mirror funding (increased income tax withholding, a boost in estimated tax payments, various funding shifts and the like) that the Democrats never had any real problem with, you get a total of $21 billion in cuts.

Sure, that’s short of the estimated $24.3 billion hole in the 2009-10 budget, but it would go a long way toward solving the fiscal problem that’s threatening California’s financial future.

While the Democratic plan was predictably short of specifics, it wouldn’t be a bad idea for the governor to shout “Done!” shake Steinberg’s and tell him to just mark those $13 billion in cuts so everyone can get on with the intensely serious negotiations on that final $3 billion needed to close the budget gap.

State Controller John Chiang was back to his role as Cassandra Wednesday, warning that California’s economy continues to sputter. Actual tax collection numbers in May were even worse than the crummy figures he had anticipated, falling $827 million short of what was predicted less than two weeks ago.

If the Legislature doesn’t take action soon, Chiang said, California will run out of cash to pay the bills on July 28 and will be $2.78 billion in the red on July 31. For anyone keeping score, that’s more than double the $1.08 billion cash shortfall the controller projected just 12 days ago.

While Schwarzenegger wants a vote on a budget deal by June 15 (that’s next Monday, folks), the Legislature’s budget conference committee is still working its way through the list of proposed cuts and doesn’t expect to be done until sometime next week. And until those recommendations come out, Republicans and Democrats can’t even be sure what they’ll have to fight about.

Those recommendations are only coming after due deliberation, which anyone familiar with the legislative process knows is not the same as “quickly.”

On her daily budget blog, Assemblywoman Noreen Evans of Santa Rosa reported that the committee on Wednesday rejected Schwarzenegger’s proposal to eliminate the CalWorks welfare program, which would have trimmed $1.3 billion from the budget deficit, but had approved both a $20 million cut in the Bureau of Narcotics Enforcement and a plan to get another $20 million by charging local law enforcement for using state forensic services.

She also noted that the governor’s proposals for the human services budget “are crying out for alternatives,’’ which is why the committee still hasn’t come up with any recommendation on many of those proposed cuts.

To add to the fun, the SEIU, which represents tens of thousands of state employees, on Wednesday began running a statewide TV ad calling for new taxes on oil, tobacco and alcohol.

“Tell Sacramento to balance spending cuts AND taxes,’’ the ad urges. “It’s just common sense.’’

Now progressive Democrats may be right when they say Californians are willing to boost sin taxes to help balance the budget. But the governor and legislative Republicans definitely aren’t, so any fight on the new taxes is almost guaranteed to produce a long, nasty stalemate, even as the budget countdown clock keeps ticking.

John Wildermuth is a longtime writer on California politics.

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