If the state budget is supposed to be a blueprint, this is
one funny structure California is building.
One month into the new fiscal year and the state is already
10 percent short of what it needs to keep the budget balanced. And as Joel Fox noted
in this space Friday, it’s not like the national economy is inspiring a lot
of optimism that things are going to get better in a hurry.
Sure, July is just one month. And the state Department of
Finance says their numbers are better than state Controller John Chiang’s
report Tuesday of a $538 million shortfall.
Local businesses could fling open the hiring window,
Californians could dig into their wallets and start buying homes, cars and
video games and then cue the confetti, happy days are here again.
But as cynics have long noted, while the race is not to the
swift, nor the battle to the strong, that’s generally not the way to bet.
The problem facing California is that the 2011-12 budget was
a bet on a brisk economic recovery that seems less likely with each financial
report.
This won’t come as a news flash to Gov. Jerry Brown. From
the day he was elected, he talked about the need to put together a realistic,
no funny business budget that used both spending cuts and revenue increases,
i.e. taxes, to provide California with a path out of it’s long-running
financial woes.
But in a harbinger of President Obama’s fight over boosting
the debt limit, Republicans in the Legislature not only wouldn’t vote for any
new taxes, they also refused to let the state’s voters decide whether they
wanted any new taxes.
And since Democrats no way, no how were going to slash their
favored programs without getting something in return from the GOP, Brown was
forced to sign another "hope for the best" spending plan that once again
spackled over the state’s fiscal problems without doing anything to fix them.
When it comes to drawing up a budget, optimism is a bad
thing. A home budget based on winning the lottery doesn’t cut it, but
California does essentially the same thing every year.
Up until the day he was recalled in 2003, Gray Davis was
convinced the economy would turn around and solve all his problems. Arnold
Schwarzenegger had no problem balancing his budgets with phantom money from the
federal government and savings that would never be made. And in June, Jerry
Brown magically found $4 billion in unexpected future state revenue got the
Legislature off the hook and let him announce that the budget was balanced.
Problem is, state law only requires the budget to be balanced
when the governor signs the budget. The second he lifts the pen from paper, he
can start talking about unexpected expense, revenue shortfalls, losing lawsuits
and those damn feds.
It’s a wink-and-a-nod bit of dishonesty that allows the
state to have a budget without forcing the governor and the Legislature to make
the hard decisions needed to ensure California’s future.
For the first time, this year’s budget includes a trigger.
If the state Department of Finance can’t say by Dec. 15 that the $4 billion
estimate will turn into real cash money, school funding will be slashed to make
up the difference.
Show of hands by anyone who thinks those draconian
Christmastime cuts actually will be made, regardless of how bad the state’s
financial situation looks.
An honest state budget, though, wouldn’t need a mid-year
Plan B. Instead, it would be balanced with spending and revenue estimates
conservative enough that the only surprises would be happy ones.
But that would require a level of fiscal realism state
legislators, especially the no-taxes-ever Republicans, are unwilling to accept.
And Brown, despite his strong words and good intentions, has let them get away
with it.
John Wildermuth is a
longtime writer on California politics.