Jerry Brown’s Budget Plan Looks Like a Pipe Dream
For the past two months, Gov. Jerry Brown has been selling the concept that were the Legislature to approve his proposed budget and voters to approve his tax increase, the state’s fiscal house would be repaired.
It’s turning out to be more a pipe dream than a realistic plan.
The courts and the Obama administration are stalling, perhaps permanently, many of the spending cuts that the 2011-12 budget had assumed.
A Legislature controlled by Brown’s fellow Democrats is refusing to jump-start more health and welfare reductions in his 2012-13 budget.
Controller John Chiang has reported that spending is running $2.5 billion above budget estimates in the current fiscal year and revenue is running $2.5 billion below expectations.
Already, then, Brown’s budget scheme is billions of dollars short of closing the state’s chronic operating deficit - and the situation got a lot worse Monday.
The Legislature’s budget analyst declared that revenue for the remainder of this fiscal year and all of the next is likely to be $6.5 billion short of Brown’s expectations, even with the proposed tax increase and even counting a $2 billion windfall from Facebook’s big stock sale.
It’s a big number - ironically, just about as big as what Brown has hoped to realize from the sales and income taxes he’ll put before voters next November - and shatters the scenario that Brown has been peddling for weeks.
That scenario has been that he and Democratic legislators would produce, by June 15, a budget that’s balanced on the assumption that the voters approve the new taxes, with automatic “triggers” that would slash spending further, especially school spending, were the tax hikes to fail.
Legislative Analyst Mac Taylor’s revenue report would, if followed, force Brown and legislators to cut much, much more deeply into the spending side of the budget ledger to produce a balanced budget - even with the assumed new taxes - by June 15 and that would mean, most likely, whacking money for K-12 schools and health and welfare services.
And were those cuts to be made, it would leave precious little to include in the automatic trigger cuts.
The alternative for Brown, et al., would be to ignore the analyst’s forecast and base a new budget on a rosy income assumption - which is exactly what they did last June to produce a budget that was balanced on paper, thereby allowing legislators to collect their paychecks, but that quickly fell apart when the phantom revenue didn’t materialize.
Another phony budget, however, would not escape notice in the media and would undercut the image of tight-fisted financial prudence Brown has been trying very hard to cultivate.
It also would hand opponents of his tax increase a ready-made argument that he’s not to be trusted.