Budget may not pass on time

The state is unlikely to pass a new budget by the June 30 deadline, which could jeopardize the delivery of social services and worsen Sacramento's already dismal financial picture, two Inland Valley assemblymen said Tuesday.

Bill Leonard and Bob Pacheco, who serve on the Assembly Budget Committee, said hearings to discuss California's mounting budget deficit - projected at nearly $22 billion - have accomplished nothing because Gov. Gray Davis has made no new recommendations since releasing his first budget proposal three months ago.

Davis spokeswoman Hilary McLean said the governor will make his final budget proposal after the May 14 budget revision is released and he fully expects the budget to pass on time.

However, Leonard, R-San Bernardino, said the state's precarious fiscal situation -- and a deficit projection twice shattered since first Davis pegged it at $12.5 billion -- will make it difficult for the Assembly and Senate to agree on a budget in just six weeks.

"Most years, we simply tweak the January budget proposal after the May revise is released," Leonard said. "But this year, we'll have only about a month to deal with what will essentially be a brand-new recommendation."

The state Constitution mandates that a balanced budget be passed by the end of June. However, Pacheco, R-Walnut, said that at this point, he can not envision that happening.

"My projection is that we're not going to make the June deadline," Pacheco said. "Quite frankly, I don't know when we'll have a budget."

The federal government can pass a budget that includes deficit spending, but state lawmakers are barred from doing that by the California Constitution. If a balanced budget fails to pass by June 30, state agencies could lose funding until one does.

Failure to pass a budget by the deadline would not trigger an immediate shutdown. However, agencies might lose the ability to purchase supplies, or shut down altogether -- as happened in 1983 when the budget passed three weeks late, Leonard said.

Pacheco, who sits on the budget subcommittee dealing with health care, said funds for such programs could be cut off if a budget impasse were to last deep into July.

And both warned that the state's cash-flow situation is less than desirable, and would be exacerbated by a failure to pass a budget by June 30.

"In addition to not having a budget, there's a real possibility we'll run out of cash," Leonard said.

McLean, meanwhile, dismissed the concerns of legislators who worry that six weeks is not enough time to fashion Davis' proposal into a workable budget.

"Keep in mind that because of term limits, you're talking to an Assembly and Senate that is new, and does not have vast experience" with this process, she said.

McLean acknowledged that the task of negotiating a budget is different than in previous years, but said it is manageable. Davis, she added, fully expects the budget to pass on time.

"The governor jumping the gun with guesses and hypothetical scenarios wouldn't serve the public well and wouldn't serve the legislature well," McLean said.

However, state government analyst Tim Hodson, who spent 15 years working in the Legislature and has run the Center for California Studies at Cal State Sacramento since 1993, said six weeks may not be sufficient, given the political realities involved with passing a budget in an election year.

"The legislature is at a disadvantage in dealing with the budget this year," Hodson said. "Because the deficit has grown so much since January, it is essentially a new ballgame, and the process will have to be restarted."

If the public at large understood this stuff, Davis wouldn't have a chance at getting out of the state house alive, much less being re-elected.

That's the thing, the budget is such a complex issue that most people get lost in the first paragraph. There are so many different pots of money, some that the legislature can't touch because of federal restrictions or earmarked funds, money that goes to one pot or another and is included in the overall budget numbers, but in fact is "unbudgetable" meaning that the money goes for a specific purpose or doesn't come in.

There is actually very little discretionary spending in the budget ... however, instead of being responsible with the budget surpluses over the past three years, Davis and the Democrats grew the size of government by 37%. Also, every year there are automatic cost-of-living adjustments. If you don't give an entitlement the COLA, that's considered a cut.

Basically, the state doesn't have the money to pay its current bills, so it is borrowing from future revenue. But how is the state going to pay it's bills next month? And the month after that? And so on. We are so far in the hole that unless we cut back the spending INCREASES Davis instituted over the past three years, we'll never see the light of day. In fact, if we rolled back the size/cost of government to a mere three years ago when Davis was first elected, we wouldn't HAVE a budget deficit.

Dump Davis!

I would suggest to Republicans that before the vote and before Davis Budget that they come up with a "Contract for the future," that lays out the conditions on which the party will endorse voting for the budget. Then make sure that the republicans stand firm in an election year.

I like your idea, but even if the Republicans stand firm on the budget, the Democrats only need four Republican votes ... and even if we stand firm, the press will NEVER report our side of the story. Been there, done that.

But it's a great idea ... and maybe because they are pissed off with many of Davis' shenanigans, they WILL report our ideas. But why do we have to come up with any solutions to the problems Davis created? As soon as we say, "We should do A, B and C", the debate is turned AWAY from Davis and onto the Republicans.

I think we need to continually point out that this is Davis' fault, just like the energy crisis and the continuing failure of our public schools. He is more interested in MONEY and ELECTIONS than GOVERNING or LEADING.

Dump Davis!

Okay, help me understand this.

If Davis & co increased the size of the budget by 37% in three years, is that 37% non-discretionary and capable of being reduced?

I know some of the items were road maintenance, and we've now made that a mandate for gas tax spending, so presumably he can't cut that again.

What do you think of Simon's January budget, as published by the Davis campaign? The Davis campaign had a very interesting analysis of both budgets which I assume is highly slanted, but most likely honest in terms of the facts. One thing I noticed was that even they said that $2,237 billion were loans. As they say (page 6) "Loans must be repaid, thereby reducing resources available in future years." Simon has only $137m worth of loans, which hardly make a dent in his figures, making the Davis $2,237bln look outrageous.

I found it interesting - and a little alarming - that the loans were included in the savings totals for both candidates, even though they are not actual savings.

Davis also used the irresponsible formula of emphasizing the two-year total of his savings. For next year, Davis only proposed custting $2,449 bbln, while cutting $10,053bln next year. Simon cut $5.4 billion now and $8,216 later. So, although Simon cut $13.6bln and Davis cut $12.5bln, Simon made nearly 40% (39.9%) of his cuts in the current year, while Davis made only 19.5% of the cuts in the current year.

What this means is that Davis is really banking on a recovery, and then he plans to roll back his cuts in a massive fanfare, regaining the full support and gratitude of his fans.

Source: The PDF file attached to Davis' budget press release

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.