Sacramento’s budget tricks might buy time, but won’t fix the state’s budget problem – Orange County Register
The California Legislature will vote today on a “junior budget bill” that cuts about $1.6 billion from previously approved state spending. Assembly Bill 106 (also Senate Bill 106) amends the 2022 and 2023 budget laws to prevent unspent funds from going out, a quick action that was recommended by the Analyst’s Office legislation as a “use it or lose it” opportunity to reduce California’s large budget deficit.
One helpful thing about a budget deficit is that it highlights some of the questionable places state lawmakers throw your money when the budget is flat. For example, the Assembly Budget Committee’s analysis found it could cut the $900,000 it had authorized to “support the COVID-19 website,” cancel $11.9 million to a pilot program called “Healthier at Home” and take $8.8 million out of a $10 budget. million dollars to an “undersubscribed” program to persuade older Californians to join CalVolunteers.
But even $1.6 billion in savings is a drop in the ocean compared to California’s budget deficit, officially estimated recently at $73 billion by the Legislative Analyst and at $38 billion by the Newsom administration’s Department of Finance. AB/SB 106 is one part of the “early action agreement” announced by the governor and legislative leaders on April 4, which is expected to reduce the budget problem by $17.3 billion.
If it seems a little fuzzy to find $17.3 billion in savings with only $1.6 billion in budget cuts, that’s because it’s a little fuzzy. The “Early Action Agreement” calls for $3.6 billion in “cuts,” but that includes $762.5 million not including salaries for vacant positions, and another $532.5 saved from something described such as “Removing the Elimination of the Two-Week Check Writing Hold with Service Fee.” .”
The rest of the $17.3 billion is mostly in accounting tricks. “Delays” generate $3.1 billion in savings, “deferrals” bring in another $2.1 billion, and “cash transfers” somehow reduce the budget deficit by 3. 4 billion dollars. Additional borrowing from special funds will give the General Fund an additional $1.4 billion.
All of these tricks can be described as chickens that will come home to roost in future fiscal years, which are expected to experience significant budget deficits of their own, according to the Department of Finance and the Legislative Analyst’s Office.
The early action agreement contains only one item under “revenue,” namely $3.8 billion from the managed care organization tax that helps fund the Medi-Cal program. The general fund will take part of the money from this tax.
There doesn’t seem to be much appetite for tax increases in Sacramento right now. The razor-thin margin by which Proposition 1 was approved by voters in March certainly sent a signal that Californians are not in the mood to give the state more money.
The governor and state lawmakers plan to use about half of the “rainy day” fund’s reserves to cover part of the budget deficit. But to do that, the governor must declare a “budget emergency.”
In fact, there is no urgency. California’s budget deficit is the result of overpromising spending and lower-than-expected tax revenue. It’s good to finally see state lawmakers looking at every element of previous budgets and revisiting programs to find out what’s not working. This should become a regular part of the budget process.
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