The Budget Crises Return

UPDATE: So, the Governor’s May Revise is out. It’s bad, but maybe not as bad as it could be. But that “not as bad” part is reliant on the federal government pitching in to help stave off some of the cuts.

The biggest cuts, due to Prop 98, come to education, where spending will fall from 81.1 billion to 70.5 billion. It also calls for a 10% pay cut for all state workers, and delaying payment to the pension funds.


Back in the heyday of Calitics, I got a lot of experience writing about the various budget battles. But once the voters passed a ballot measure to increase taxes, and then reconfirmed that a few years later, that seemed like a thing of the past. We had a big surplus, built up a big rainy day fund under Gov. Brown and then Newsom, and could even ride out an economic downturn, or a natural disaster like an earthquake or a bad wildfire season.

But then came COVID-19, and all of a sudden, the budget crisis is back like it is 2009-10.

California Gov. Gavin Newsom is expected to reveal his plan Thursday for plugging an estimated $54.3 billion, coronavirus-created hole in the state budget. … Four months ago, Newsom revealed a $222.2 billion spending plan that included a nearly $6 billion surplus…(AP)

Frankly, $54.3 billion is not cutting the fat territory. The Legislature has identified areas to save, but given that we don’t know how long the pandemic will last, how deep the job losses will get, any numbers still seem speculative. And even if we dumped all the rainy day fund, and delayed expenses for the next two years, they were only able to identify $94billion…including $33 billion that the federal government has not yet authorized.

And that, of course, brings us to Mitch McConnell, who is NOT fond of, um, the states. His position has morphed several times, so it is difficult to actually pinpoint at any given time. He seems to be negotiating via conservative radio with his idiotic statements about “blue-state bailouts.” New York Governor Andrew Cuomo took him to task on that particular line of argument, pointing out that New York sent $116Bn more than it got from the federal government, while McConnell’s Kentucky took $148Bn more than it sent the feds. But I’ll leave others to lambast McConnell, there’s plenty of smart content out there on that subject already.

The biggest difference between the budget crises of the first decade+ of this century and the current crisis are the Democratic supermajorities. There will be no Abel Maldanado this year, after all, those seats are now held by Democrats. That is not to say that there won’t be fights between “moderates” in the Legislature and the more progressive legislators.

Gavin’s natural policy background puts him smack dab in the middle, and so today’s announcement will be informative on the direction of the state during the crisis. Stay tuned…