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Trigger Cuts the New Normal

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Trigger Cuts the New Normal

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Trigger cuts are the new normal.

The state budget cut triggers haven't been pulled yet -- that is likely to happen in the next several days -- but Gov. Jerry Brown is already talking about using the tools again.

Under triggers, Brown and the legislature assume certain revenues. If they don't materialize, additional cuts are automatically triggered.

This was how the budget was finished in June. $4 billion in additional revenues were assumed; now that the revenues aren't projected to materialize, some $2 billion in cuts are likely to be triggered.

Brown told Bloomberg Business Week in an interview this week that he'll do the same thing in fashioning next year's budget; he's scheduled to make his budget proposal in January.

That budget will assume that voters approve additional tax revenues in a November 2012 ballot initiative. If voters don't approve those taxes, cuts will be automaticaly triggered.

“We’ll propose cuts and the taxes, and if the taxes don’t materialize, I will propose we have trigger cuts that go into effect immediately," Brown was quoted as saying by the magazine.

This is smart politics.

Voters may be more willing to vote for tax increases if they can see the specific cuts that would take place if they don't. But it's bad policy. It makes it impossible for major recipients of state funds -- public schools, local governments -- to plan for the future, since their budgets can be cut in the middle of a budget year.

The triggers are also a way to disguise new debt and hide the structural deficit. Note that Brown's first triggers were based on a phony assumption of $4 billion in revenues. But the trigger cuts amount to $2 billion -- only part of the shortfall.

But disguising the problem is politically irresistible. Whatever you think of triggers, they appear to be here to stay -- the latest new tool for California leaders who must struggle to manage an unmanageable budget.

Let us know what you think. Comment below, send us your thoughts via Twitter @PropZero or add your comment to our Facebook page. 

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