The Dystopic Present: $13B Deficit

State faces another looming budget crisis

by Brian Leubitz

UPDATE: I’ve included video of Taylor’s press conference from John Myers’ twitter feed. Thanks John!  You can get the full press conference from the CalChannel here.

I’ve been a little quiet around here, as I was more than a bit busy with the election and then trying to recover from said election.  And Sacramento was hardly hopping either, just a few press conferences here and there.  However, Leg Analyst Mac Taylor (and sometimes Right-leaning Budget Warrior) has been on the grim watch on our state finances along with Finance Director Ana Matasantos.  And grim is really the best adjective for the situation:

The report by the Legislative Analyst’s Office says the state faces a budget deficit in the current fiscal year largely because it will collect only $300 million of $4 billion that Gov. Jerry Brown and the Legislature added to the budget just days before it was approved in June. Critics had called the sudden infusion of projected revenue “phantom money” that was conjured to avoid deeper spending cuts.

The report says California also faces a budget deficit in the 2012-13 fiscal year of $13 billion.(SF Chronicle)

I’m not sure how bright I can highlight this situation, but we are steamrolling towards another budget crisis.  And guess what, there is so little left to cut, there will be no other choice to cut deeper into some already devestated state services.  Of course, much of that could be avoided with a bit of reasonableness from the other side of the aisle, but let’s be realistic here. Unless somehow four Republican legislators get a Dickensian like visit from beyond, do we really think that is going to happen?

Now, the ultimate determination will be made by Matasantos by December 15, but given that relatively few of those $4Billion have come in, it is tough to imagine that she will have much choice. The $4 Billion will hit education particularly hard, with the possibility of eliminating 7 school days from the year. As David Dayen points out, the threat of a $13B series of cuts threatens to make ridiculously small the few parts of President Obama’s jobs package that can pass Congress. $1 Billion in veterans benefits will do little to combat the biggest of the 50 Little Hoovers here in California.

It is hard to really blame Gov. Brown for much here, other than his rosy expectations. The Right will take the usual attack on Democrats of being too close to labor, but even if he totally decimated pensions and laid off huge portions of the state public employees, we still wouldn’t get near dealing with the situation.  But the fact remains that the $4 Billion that has failed to show was put in the budget because the cuts without them would have been unbearable.

So California, meet the dystopic future, where cutting K-12 school days and rocketing higher education fees are the best option.

4 thoughts on “The Dystopic Present: $13B Deficit”

  1. they would end state funding of abortion

    eliminate all state funding for stem cell research since there is now federal funding

    stop subsidizing illegal immigrants

    end defined benefit pensions

    and withhold state funding for sanctuary cities

  2. The one time mid year 4% cut is awful enough, but it was expected.

    4% cuts for the indefinite future are a body blow.

    Many school districts have been doing some deficit spending, eating into reserve funds tactically to try to preserve particular programs and people. Many districts are pretty close to the end of what they can do there as it is, especially with 20-30% of their annual budget being phantom money, deferred payments from the state.

    So those 4% cuts in revenue, if they have to be extrapolated out three years, are going to mean cuts closer to 10% in some districts, on top of several years of 5% and 10% cuts. And the lack of revenue is going to create its own costs – cash flow problems, lack of time to pursue grants and fundraising, inability to do many forms of long term planning. K-1 combined classes of 31 kids are going to lead to more special ed, ELL, and supplemental support costs down the road as well as long term lower achievement for those kids… those kids who will be our taxpayers (or not) for 50 years 15 years from now.

  3. As you say…. “But the fact remains that the $4 Billion that has failed to show was put in the budget because the cuts without them would have been unbearable.

    (Emphasis added.)

    So it is really all about show….?  Maybe they should have fictionalized $8B or $12B so everyone would have been giddy… for awhile.  

    Sorry, this is why fiscal conservatives have turned a deaf ear to funding the S.S. California as it steams into the rocks.  

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