Posted on 01/12/2007 12:10:08 PM PST by NormsRevenge
Some will call her a dose of reality, others will call her overly cautious. Either way, the Legislature's nonpartisan budget analyst has taken a quick glance at Governor Schwarzenegger's budget and finds it lacking in realistic solutions to the state's fiscal problems.
Legislative Analyst Elizabeth Hill's bottom line is nicely summed up in one sentence: "While any budget is subject to risks and uncertainties, we believe that the number and magnitude of these risks is unusually high in the current plan."
And that's coming from someone who's read a lot of optimistic budget proposals from governors in the past.
Hill's analysis takes issue with the governor's assertion in his Wednesday news conference that his team has erased the state's multi-billon dollar deficit. On the contrary, she argues that the budget plan could be derailed by everything from court challenges, to revenues that never materialize, to an economy that may be slowing down more than Schwarzenegger's team thinks.
"Adverse outcomes in just a few of these areas could easily eliminate most or all of the budget's proposed reserve [cash]," she writes.
Hill and her analysts question the governor's plan to divert surplus public transportation funds (because it might leave public transit programs short of cash if gas prices drop, and might also raise legal challenges if the money shuffle ends up lowering the constitutional guarantee for K-12 education).
Also dinged are the budget's reliance on revenues from new Indian gaming compacts and the successful outcome of pending lawsuits. And on top of those policy issues, the LAO analysis takes issue with the governor's assumptions about the economy and tax revenues-- arguing that his Department of Finance may be overstating revenues by a total of more than $700 million in the current and pending fiscal years.
"It will be important that the Legislature develop a more realistic budget," says the LAO report.
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