No fat lip. Just fat
The other day the governor fell off his motorcycle. Today he fell off the wagon. The budget-balancing wagon, that is.
Schwarzenegger had been making slow if not spectacular progress in balancing the state budget since he took office in the fall of 2003. The structural gap between spending and revenues estimated for the coming year shrank from about $16 billion when he took office to less than $4 billion, and a balanced budget was actually in sight. But his proposal today would spend $7 billion more next year, while the state’s revenues are expected to increase by just $4 billion. He has stopped making progress. Now he is going backwards.
The governor is proposing to spend about $98 billion next year while revenues are expected to total $91.5 billion. He would cover that gap with money left in the budget by what is believed to have been a one-time windfall of tax payments. Then he would run for re-election, roll the dice and hope for the best.
(snip)
But the bottom line is that this budget would begin with a positive balance of $7 billion (thanks to a one-time surge in tax revenues) and end, if all goes well, with a balance of about $700 million. Then, next January, most of the spending in this plan would continue, and grow, according to law, while revenues will almost certainly not keep pace.
Mike Genest, the governor’s director of finance, estimates that whoever is governor one year from today will be looking at a structural gap of about $5.5 billion, including about $2 billion the law requires be put into the state’s long-term reserve. And the surpluses that have papered over the past two years’ operating shortfalls would be gone. That means the governor in January 2007 would have to propose $5.5 billion in spending cuts, tax hikes or a combination of the two to balance the budget.
(snip)
OK, Its getting clearer, Yes Yes, I see it now.. ;-)
129.9 Billion
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")