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More Budget Confusion

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More Budget Confusion

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California Gov. Jerry Brown stands next to a chart that shows dollar amounts in the millions that were cut from the State's budget following a bill signing last year.

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Schnur On State Budget Crisis

Is what California Governor Jerry Brown did last week when he released the budget plan tantamount to delivering a ransom note to the people of California? Dan Schnur, former political consultant and now the director of the Jesse Unruh Institute of Politics at USC explains.

Cutting School Funding: Smart Politics?

The budget released by Gov. Jerry Brown's last week forces voters to make an uneasy choice: approve a $35 billion tax increase in November or severely cut public school funding. But is education really at risk or is Brown playing smart politics?
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If, as some economists believe, California's recovery is just around the corner, then we're traveling down a very long block.

Gov. Jerry Brown and the Legislative Analyst's Office have been sparring over future revenues and expenditures, but only the state controller knows for sure. His office actually counts the money coming in and going out, rosy projections notwithstanding.

The news is not good.

Compared with the estimated numbers in the 2011 Budget Act for the current year, revenues are down $2.5 billion, including personal income taxes, sales taxes, and corporate income taxes.

At this pace, the state will bring in $5 billion less over the current fiscal year than projected.

And that's in addition to the 2012-2013 revenue gaps discussed by Brown and the LAO of somewhere between $9 billion and $13 billion.

Worse, there's no sign that future revenues are pointing upward any time soon.

Department of Finance spokesperson H.D. Palmer views the latest numbers as "an extremely small variance" from expectations.

And folks - viewed over time, we're talking big bucks.

The controller's news also underscores Brown's claim that without voter approval of his ballot proposition asking for $7 billion in temporary taxes next November, a new round of draconian spending cuts in K-12 public education and all other areas of state service will occur beyond anyone's imagination.

Still, there's another point: The controller's report reaffirms a long-standing problem in California, and that's the different interpretations from separate independent institutions of how much money is in the bank.

It's a painful reminder of the mess that occurred just prior to the passage of Proposition 13 in 1978.

Then, the governor, Legislative Analyst, and Board of Equalization, squabbled about the extent of a state surplus, leading a disgusted public to pass a tax cut that leaves the state reeling to this day.

Now, once again, the public remains confused and dismayed about the true nature of the state's finances.

Just how big of a hole do we really have?

The question may be simple enough, but convincing a skeptical public with a single believable answer will be another matter altogether. And with that confusion, the future of Brown's ballot proposal is likely to remain in the balance.

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