Mark the date: Dec. 10.
That’s the day Controller John Chiang will publish the latest monthly revenue statistics for the state of California.
As of the current fiscal year (which began in July) and using a budget adopted by the California State Legislature and signed by Gov. Jerry Brown, the sobering bad numbers are as follows:
July: $538.8 million (-10.3 percent) below budgetary projections.
August: +$134.9 million above (+2.1 percent).
September: -$301.6 million below.
October: -$810.5 million below.
Total thus far: Over $1.5 billion shortfall.
The November shortfall numbers will be released on Dec. 10—the date you marked on your calendar.
Also around that date, the governor’s Department of Finance will announce its version of the budget deficit.
Stay with me here. The reason all these numbers are important is the word “trigger.” If the total budgetary shortfall exceeds $1 billion-$2 billion, automatic cuts proceed—cuts that affect everyone in the state of California. Education, health care, police, fire, redevelopment, etc. Local school boards and even the once staid UC regents are already facing outrage and disruption. School days will be cut, tuition already hiked will be hiked again.
Recently, the state Legislature threw in the towel—finally admitting that the budget gap could reach nearly $8 billion—more than twice the original $3.1 billion shortfall projected by Brown’s finance director. They originally teamed up to insist that the federal government would provide a $4 billion windfall to the state. According to the Sacramento Bee, it didn’t happen. Won’t happen.
It gets worse.
Perhaps the most honest assessment of California’s debt problem comes from the highly regarded, nonpartisan Legislative Analyst’s Office. It is also the most brutal:
“The budget problem consists of a $6 billion projected deficit for 2010–11 and a $19 billion gap between projected revenues and spending in 2011–12.”
Simply put, the state’s budget is way out of whack going into the next fiscal year, and the reality will hit right around Christmas.
This year’s “balanced budget” was all cotton candy—looked and tasted good, but totally lacked in nutrition.
Looks like the Grinch stole California.
However, if there is one elected official in this state who can reverse course quickly, find his bearings, and skip the “truthiness” of budgetary nonsense, it is Brown—the Grinch himself; though his Jesuit training often snarls him in thought problems for the sake of thought problems that lead to more thought problems.
Nonetheless, his decades of experience, and his flashes of insight, can sometimes lead to candor—not just more reflections on reflections.
Hence, with a little self-discipline (also a Jesuit training) Brown could be the Grinch who saved California.
How is that possible? Simple. Tell the truth. Make the cuts. Accept the triggers. And stop spinning more cotton candy.
As a self-described tightwad, Brown needs to:
Stop the borrowing (we can’t afford the interest on the bonds).
Stop the spending (LOTS more available to cut; just look in his “All Cuts" binder that he showed the San Francisco Chronicle editorial board during his campaign but has refused to open since).
Cut more than just cell phones.
Cut the Legislature’s budget. Cut the governor’s budget. Cut the entire executive branch’s budget. Again, and again and again.
Cut the UC’s budget and ask for the removal of any regent increasing student tuition. Same for the state colleges and universities. There is lots of administrative and other fat on those campuses. Task this out to Lt. Governor Gavin Newsom. He gets it.
Match the state’s assets with its liabilities.
Marry the UC medical schools to the prison health care system and wed both of them to the new health care exchange. Same with the state college nursing programs. Ditto for budget analysts and architects, etc. Student internships save lots of money and provide critical care experience for young job seekers. This is a growth industry.
Ask for a waiver from the new health care Law. Not an exemption; just a time delay until the state can get its finances in order and/or the U.S. Supreme Court renders a decision.
Ask for a delay—if not an outright derailment—of the California bullet train. The money is not there. It is not coming. It will not be built in our lifetime. And the movement to drive local, live local, eat/farm local will be more mainstream than a speeding bullet train. What happened to “small is beautiful?”
Do not spend precious time crafting a wizardly ballot initiative to raise more taxes, revenues, fees, enhancements, sunset bonds, etc. The macro-economics of the European and Asian economies preclude more happy talk or “extend and pretend” budgets. The reality on the ground belies all the political mania about a quick turnaround. This is going to be a long, drawn-out slog.
The voters know this. According to a San Jose State University poll written about in the Sacramento Bee, consumer sentiment among Californians has dropped to 64.5—where anything below 100 is negative! And 85 percent of Californians believe the state is still in recession.
Small wonder that. They see it all around them.
Assume, like a good Jesuit-trained Catholic, that you are about to meet your Maker. What would you answer when asked, “What did you do to save the Christmas spirit?”
Brown knows a great deal about the state. Time to lead—without artifice.
In so doing, Brown could be the Grinch who saved California.