NEW YORK, NY - DECEMBER 21: A total lunar eclipse occurs as the full moon is shadowed by the Earth on December 21, 2010 in New York City. The lunar eclipse was visible during the early morning hours in North and Central America, revealing what seemed to onlookers as an eerie reddish glow on the moon. (Photo by Chris Hondros/Getty Images)
Human beings love good news, which is why you're hearing so much about the $6.6 billion in unanticipated revenues that the state now expects.
But Californians should wipe that smile off their face. For California's budget and governance crisis is so profound that good news isn't really good. We are stuck under a bad moon.
How's that? First off, the anticipated increase is uncertain, and closely tied to capital gains, which are hard to predict. Another downturn in the market, and the new money could dry up quickly. Second, even this gain isn't enough to wipe out big, structural multibillion dollar budget deficits that, by some estimates, reach $20 billion a year.
That said, the biggest reason why good news isn't good has less to do with math and more to do with the budget system. Under the complex series of formulas and fiscal rules that govern California's finances, spending is always being ratcheted up, automatically, and taxes are ratcheted down. The voters also contribute by mandating spending and limiting taxation at the ballot box. In short, the budget system is always working against us, making the deficit hole deeper.
Even a tidal wave of money won't fix the budget. California needs to unwind this broken system, so that it can experience the joys -- and choices -- that comes with real budget good news.