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Reason Foundation

California Budget Sham Already Falling Apart

Adrian Moore
September 27, 2011, 12:40pm

Dan Walter's points out that 3 months after the "balanced" budget was passed, it is obvious it will be luck to last 6 months.

It's been proposed from time to time that the state go on a two-year budget cycle that coincides with the Legislature's biennial sessions, on the theory that it would result in more comprehensive and forward-looking fiscal plan

However, the Capitol has been going the other direction in recent years as governors and lawmakers wrestle with chronic budget deficits. It's been on roughly a five- to six-month budget cycle.

So basically the legislature is locking in with its short-term approach and fiscal myopia.

The story is always the same. They pass a "balanced" budget by assuming fantasy revenues, then within a month or two it becomes obvious that revenue won't happen, and the budget has to be reworked.

There is more anxiety in the legislature this year because the budget deal included so-called "triggers"--automatic spending cuts to take place if revenue doesn't match projections.  Since revenue has not matched projections, democrat lawmakers have been in a panic that the cuts might actually happen, and even passed a bill to overturn the "triggers" but Gov. Brown vetoed it.

Will the triggers be pulled if the money isn't there?

Probably not. They were something to satisfy lenders, not engraved into the Capitol's granite walls.

If, as now appears likely, that 2011-12 revenues do fall significantly short of assumptions, it simply will mean that Brown et al. will reopen the budget in January, thereby continuing the standard six-month cycle.

Hey guys, how about a real budget for once!?


Adrian Moore is Vice President, Policy


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