May 12 2009
New - and larger - California budget deficit.
As has been pointed out for many weeks on this blog, the way California makes its revenue projections is way off. To tell us how far off, let’s ask the Governor. Yesterday he said that there will be a $15 billion dollar deficit through next June if the ballot propositions pass, or $21.3 billion if they do not pass.
This announcement comes less than 2 months after the Legislature and the Governor “closed” a $40+ billion hole through next June. Now the problem becomes negotiation. If the ballot propositions fail, then the Republicans have strong support for saying that Californians don’t want new taxes and borrowing. Which means cuts are what is left.
To be fair, California provides services far beyond the bare minimum required by law. But cutting back to what is required by law isn’t going to happen. Instead the Governor will close flashy programs - like firefighting - to try and force a solution.
Good luck.
