Claremont Insider: California Catches a Break

Friday, January 23, 2009

California Catches a Break

The Los Angeles Times reports today that the federal government's proposed $825 billion (that's BILLION with a "B") economic stimulus package, could include over $11 billion for California. Most of that, about $7.3 billion, would go towards healthcare costs to fund Medi-Cal programs. Another chunk, about $4 billion, would go to education.

This would all help whittle down the projected state budget deficit from around $42 billion down to only $31 billion (again, with a "B"). Still, this all makes it easier for Sacramento leaders to cobble together another one of their last minute fiscal agreements. Hopefully, the feds aren't just enabling more bad behavior on the part of our state government and that we will end up with permanent, long-term solutions that will prevent this sort of near-collapse from happening again.

As the Times article observed, the money, though enormously helpful, won't prevent the state from having to begin issuing IOU's come February:

"It will be a huge help to us in resolving our current fiscal problems," state Senate President Pro Tem Darrell Steinberg (D-Sacramento) said.

But he and Assembly Speaker Karen Bass (D-Los Angeles) warned that it solves only part of the state's problem and lawmakers are running out of time to deal with the rest. "We have to make really horrible cuts, and we have to raise revenue, but we are just hoping whatever we get will help us avoid deeper cuts," Bass said.

State Controller John Chiang plans to suspend payment of tax refunds, college grants and some welfare checks if lawmakers do not take action by Feb. 1. The state, he says, simply won't have the cash to cover them.

Legislative leaders on Thursday met with Gov. Arnold Schwarzenegger to discuss the budget in their first joint meeting in nearly a week. The three-hour discussion failed to produce any agreement.

Let's just hope the stimulus package isn't treated as so much fiscal meth by the hopelessly addicted in our state capitol. Intervention is still the order of the day on both sides of California's political aisle.