California budget gimmickry falls flat, just like it did before 

Jerry Brown was specifically nonspecific when asking California voters last year to return him to the governorship — especially when it came to the state’s chronic budget deficit.

Although pledging to balance the budget without gimmicks, Brown refused to say whether he’d raise taxes, which he knew would alienate many voters.

Nevertheless, Brown’s first budget was keyed to continuing some temporary taxes that were on the verge of expiring.

“For 10 years,” Brown told reporters, “we’ve had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth.”

Ultimately, the taxes — roughly $10 billion a year — didn’t fly because he couldn’t get a few Republicans to agree to place them before voters without conditions that Democrats would not accept. So Brown and Democrats then developed and enacted an alternative budget that relied, instead, on a new assumption that the state would receive $4 billion in extra revenue from an improving economy.

Scarcely a month later, that $4 billion windfall is looking more and more like the sort of time-buying gimmick that Brown promised to shun. In fact, revenues in July, the first month of the fiscal year, ran 10 percent below expectations.

The new budget is loaded with shaky assumptions. A multi-billion-dollar raid on local redevelopment agencies is being resisted in the courts. A $150 fee on rural homeowners for firefighting is the subject of a referendum, as is a $200 million effort to collect sales taxes from Internet sellers.

The risky factors in the budget add up to just about $10 billion, the same amount as the sales, income and car taxes Brown sought to extend.

It would appear, therefore, that Brown did exactly what his most recent predecessors did when faced with an unbalanced budget — closed the gap with gimmicks that he knew would likely fall apart.

The budget contains spending cut “triggers” that would be automatically pulled early next year if the revenues fall short, but they are just as problematic as the money.

If, indeed, the extra money doesn’t materialize and/or those other shaky elements falter, there’s no way that Brown and lawmakers would merely allow spending to be automatically reduced.

Rather, it would force them to reopen the budget in January, continuing the tradition of passing budgets that are good — on paper — for just a few months before they fall apart.

Dan Walters’ Sacramento Bee columns on state politics are syndicated by the Scripps Howard News Service.

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Dan Walters

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Thursday, Oct 30, 2014

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