Well, it didn't take long for the great state budget fight to heat back up.
Just yesterday we had a post or two about the financial problems our city and every city in the U.S. is caught up in. We also speculated that there might be more problems on the horizon. Californians were beginning to get comfortable with the notion that the geniuses on both sides of the Sacramento political aisle had solved our state's budget problems.
Now comes a warning from the state's Legislative Analyst's Office (LAO) that we're still likely to face an $8 billion shortfall, despite the budget agreement and the $31.5 in federal stimulus package money California is slated to receive.
The Sacramento Bee's Capitol Alert reported that the legislature's budget analyst, Mac Taylor declared yesterday that "the state's economic and revenue outlook continues to deteriorate." The Capitol Alert post went on to say:
"Even in the few weeks since the budget was signed, there have been a series of negative developments. Our updated revenue forecast projects that revenues will fall short of the assumptions in the budget package by $8 billion. Consequently, the Legislature and governor will need to adopt billions of dollars in additional solutions in the coming months to bring the 2009-10 budget back into balance."
Taylor had some more bad news for the state's political leaders. Because so many of the "solutions" adopted last month are temporary, "without corrective actions, the state's huge operating deficits will reappear in future years - growing from $12.6 billion in 2010-11 to $26 billion in 2013-14."
The Los Angeles Times also quoted Taylor in an article in today's paper:
California's economy in is such bad shape that Taylor's office anticipates that residents' combined personal income will be lower this year than it was last year, leading to fewer tax dollars for state coffers.
"I went as far back as 1950, and I could not find a situation in which personal income had actually declined in the state, so that's a rather unusual event," Taylor said at a news conference Friday.
Taylor's projections assume that the all of the various ballot measures the budget agreement depends on will pass in May. Those assumptions are far from certain, however. The California League of Women Voters issued a press release on Thursday coming out against Props 1A, 1C, 1D, and 1E. The League says these are bad policy:
“We oppose these measures because they are NOT the solution to our long term financial crisis, with the continuing structural deficit in the state budget and flawed budget process,” said Janis R. Hirohama, president of the League. “We make this decision with regret. We would support real reform to make the state budget process more accountable and give the Legislature and Governor effective tools to advance state priorities. However, these hurriedly drafted propositions, produced at the end of a flawed process that kept both the public and most legislators in the dark, will only make our fiscal situation worse.”
This bodes ill for the likelihood of the measures passing because you know there also will be plenty of anti-tax and small-government activists fighting the propositions. Here's the full LWV press release (click on the box in the upper right corner to enlarge):
In case you were curious about how we got into this mess in the first place, there's a really good video that explains how our financial house of cards fell apart. We saw this on the Original Skrip, and also saw it on the Foothill Cities blog back when it was still a semi-regular blog.
The video's 11 minutes long, but it is worth watching if you've got the time to spare:
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
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