Feb 20 2009
106 Days and We Finally Have A Solution
It has been 106 days since the Special Session was called to deal with the budget deficit. There is finally a solution.
Early yesterday morning the Senate passed the budget package, and the Assembly passed it swiftly thereafter. The Governor signs the bill later today, and then it becomes law.
It isn’t the best package - it relies on almost $11 billion in borrowing - or hoping that federal money will be given to the state. There is no way that this state will be able to sell bonds and borrow - no one wants to lend us any money. Let us hope the federal government comes through with some money.
There are also a series of reforms in the package - most of which have to go to the ballot box. One of the reforms is a “hard” psending cap. All it means is that California’s spending will be idnexed for growth and inflation and the state cannot spend more than that. Anything extra goes to a rainy day fund to prevent more years like this year. If there is still extra money, then it can be used for one time costs or reductions in taxes - not on-going ones. This is a big reform. Republicans can sit back and declare that they won with this reform. And now they need to push for it at the ballot box.
Other things going to the ballot box are an open primary system (which isn’t a bad thing, more to come on that later) and changes to various propositions that will allow for more flexibility for the state in using variosu revenue streams.
The big thing to come out of this package, besides new taxes and fees, is the reform. It is a good thing, and something to be proud of.
That it took so long to do should make the Legislature ashamed.
Any bets on how long this package stays solvent? It should last through the end of today. But even with the reforms, the Legislature is famous for passing budgets, and getting governors to sign them, that unbalance by the end of the day. Let’s hope that’s not the case.
