There’s a lot less than meets the eye in that UC study that found the furlough days ordered by Gov. Arnold Schwarzenegger aren’t saving as much money as originally advertised.
The numbers may be right, although it’s likely to be a battle of dueling economists as the governor’s finance folks put on the green eyeshades and go over the numbers from the Berkeley Center for Labor Research and Education.
But even if the three-a-month furlough days from 193,000 state workers are only saving around half the anticipated $1.3 billion, as well as boosting California’s costs in future years, the governor is still a political winner.
Whatever the actual dollar figures are, $1.3 billion is the number that was used to balance the budget Schwarzenegger signed in July. And while there may be added costs or less savings in future years, hey, that’s the future.
The state Constitution says the budget has to be balanced when the governor signs it. It doesn’t say the budget has to stay balanced five minutes after the governor puts down his pen.
State budgets typically are exercises in optimism and this year’s was no exception. For example, the budget signed by Schwarzenegger calls for the state to get $1 billion from the sale of part of the State Compensation Insurance Fund. But that sale is nowhere in sight. The budget also includes $82 million in savings from cuts in caregiver services to seniors and disabled in the state. But a federal suit challenging those reductions could blow another hole in the budget.
Then there are the millions of dollars in budget savings the state expects to get from reducing fraud in programs like Medi-Cal and by increasing government efficiency.
Let’s let Tom Campbell, former state finance director and GOP candidate for governor, give his take on wishful thinking in public finance.
“Hopefully we can get even more savings, but it’s unwise to budget on that assumption,’’ Campbell said in his own look at the current budget.
Regardless of the actual savings from the furloughs, Schwarzenegger wasn’t exactly taking on baseball, motherhood and apple pie when he decided to slam state workers with the equivalent of a 14 percent pay cut.
In the best of times there’s plenty of grousing about government workers, their pay and their pensions. And right now is not the best of times.
When state Senate President Pro Tem Darrell Steinberg complained that state workers were being singled out for an unfair financial hit, Schwarzenegger spokesman Aaron McLear played directly to the millions of voters outside the company town of Sacramento.
“We simply disagree with the Legislature that state workers should be shielded from the same economic realities that every California family and business is facing,” he said.
Stirring stuff, although it certainly doesn’t address the fiscal concerns raised by the UC study. But that’s economics, not politics.
With a projected deficit of better than $7 billion next year and a new report from state Controller John Chiang saying that, three months into the fiscal year, revenue is already $1 billion below budget estimates, those financial chickens are going to come home to roost.
But that’s later. And for politicians facing tough, unpopular decisions, later is always better.
John Wildermuth is a longtime writer on California politics.