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Gov. Jerry Brown and his fellow Democrats in the Legislature settled on a hastily revised state budget last June – after Brown had vetoed legislators' first version – and pronounced it to be balanced and timely. "My colleagues and I have voted on a responsible budget," Assemblyman Roger Dickinson, D-Sacramento, told constituents in a newsletter, adding, "While we have projected additional revenues, we have also identified further tough cuts if these revenues are not realized. We are charged with the responsibility to pass a balanced budget on time. Democratic lawmakers have done so." Dickinson wasn't alone in crowing to constituents...

California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today. The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June. But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is...

Last Tuesday, the Public Policy Institute of California issued a new poll that found, among other things, just 17 percent of the state's voters like the Legislature's performance. Simultaneously, the Legislature's top leaders provided another reason for Californians to harbor such scorn. Assembly Speaker John Pérez and Senate President Pro Tem Darrell Steinberg announced that they would spend untold amounts of taxpayers' money on high-priced lawyers to sue state Controller John Chiang over his decision to withhold legislators' paychecks last year after they failed to enact a balanced budget. Chiang was merely enforcing a new provision of the state constitution...

Democratic legislative leaders sued Controller John Chiang today for blocking their pay during last year's budget dispute, a decision that drew scorn from lawmakers last summer. Senate President Pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez said the Democratic controller overstepped his bounds when he decided that lawmakers sent Gov. Jerry Brown a flawed budget last June and docked their pay. They said they are not suing for back earnings, but to ask the court whether Chiang can intervene this year if lawmakers face another budget dispute with Brown at the June 15 deadline. The lawmakers filed in...

Gov. Jerry Brown's new budget says that the state's shaky finances are "exacerbated by an unprecedented level of debts, deferrals and budgetary obligations," which he describes as "a wall of debt." However, California's debt, much of it run up over the last decade, is more like a mountain, at least a Mount Whitney and perhaps a Mount Everest. Brown's budget cites the $33 billion in on- and off-the-books debt run up in recent years to cover the state's operational shortfalls – notwithstanding various constitutional prohibitions on deficit spending. It also cites constitutional obligations to restore school financing and mounting payments...

California's dark days of budget deficits and severe spending cuts may be nearing an end. Since the economic collapse in 2008, state leaders have seen a steep drop in tax revenue that had them jostling to keep public services intact in schools, universities, prisons and aid to the poor, disabled and sick. General fund spending has dropped by $17 billion since 2007 - from a high of nearly $103 billion - and the cuts continued as recently as last week when Gov. Jerry Brown announced another $1 billion reduction to programs serving California's 37.5 million residents. And the Democratic governor...

California taxpayers should ask themselves, in the words of Clint Eastwood's famous movie character, "Do I feel lucky?" We're not staring down the barrel of "Dirty Harry" Callahan's gun wondering whether there's a bullet in the chamber. Instead, we're gambling our financial future on whether public pension fund investments will surpass reasonable expectations. If state Treasurer Bill Lockyer, union leaders and the state's largest government employee retirement funds have their way, they'll continue betting against the odds. It's not surprising. It's not their money at risk. They won't have to cover the losses. Taxpayers will. Last week, a study led...

California's public schools received a rare bit of good news Tuesday when Gov. Jerry Brown largely exempted them from automatic reductions in state aid, citing improvements in the economy. However, Brown's declaration that the economy is getting better and he doesn't have to squeeze all automatic spending cut "triggers" also lessened the air of crisis and therefore complicated Brown's efforts to persuade voters to raise taxes next year. "The economy of California is recovering," Brown said as he announced that about half of the $4 billion in questionable new revenue is materializing, adding, "We're getting wealthier by the day but...

Gov. Jerry Brown will slash higher education, child care and school bus service, but he will largely spare K-12 classrooms from mid-year cuts under a revised budget forecast to be released at noon, sources said. K-12 school districts were at risk of losing as much $1.5 billion - the equivalent of seven instructional days - under the budget Brown and lawmakers enacted earlier this year. But sources said they will face a smaller $70 million reduction, or about $11 per student. That should avert massive reductions in the school calendar or other drastic measures for most districts. Districts will still...

SACRAMENTO -- As Gov. Jerry Brown gets ready to pull the trigger on more budget cuts this week, lawmakers and interest groups are bracing to see how devastating the cuts will be. While many in the Capitol are resigned to the worst, some believe the governor will do all he can to avoid cuts to schools -- no matter what the revenue figures show. "He can spin the economic data either way as governor," said Kevin Gordon, a leading education lobbyist. "Ultimately, it's a political decision." On Thursday, Brown will announce the long-awaited results of his finance team's forecast for...

California would impose $2 billion in mid-year "trigger" cuts next month, mostly through K-12 school reductions, under a new revenue forecast issued this morning by the nonpartisan Legislative Analyst's Office. The LAO also said the deficit for the year beginning July 1, 2012 would be nearly $13 billion. The analyst's report is not the sole determinant of whether the state will impose those cuts, but it is one of two tools the Department of Finance must rely upon before deciding whether to slash spending. The finance department will issue its own forecast in December. The Analyst said the state will...

The state constitution assumes that the governor and the Legislature will pass one state budget each year, and that's the way it worked for many decades. It's been proposed from time to time that the state go on a two-year budget cycle that coincides with the Legislature's biennial sessions, on the theory that it would result in more comprehensive and forward-looking fiscal plans. However, the Capitol has been going the other direction in recent years as governors and lawmakers wrestle with chronic budget deficits. It's been on roughly a five- to six-month budget cycle. The Legislature passes a budget, but...

Gov. Jerry Brown is doing well in the polls right now, but he's got a problem in the works that could really take him down. Check in with legislative analysts - the state is on track to run out of money by Thanksgiving. It turns out that the budget Brown signed had revenue projections that were ... well, I won't call them phony, but let's just say they've turned out to be several billion dollars short of accurate. Plus, the courts stopped him from pulling in the money he was hoping to raise from redevelopment agencies across the state. In...

State Attorney General Kamala Harris has rejected a GOP request that she opine on whether the state budget signed by Gov. Jerry Brown is constitutional. Republican lawmakers asked Harris last month to examine whether the budget complies with the constitution's requirements for education funding. Supervising deputy attorney general Susan Duncan Lee wrote in response that Harris' office could not do so because it will likely have to represent the state should someone sue on those grounds. Interestingly, Lee suggested in a Tuesday letter that the budget is destined for a court battle.

Jerry Brown was specifically nonspecific when asking voters last year to return him to the governorship – especially when it came to the state's chronic budget deficit. Although pledging to balance the budget without gimmicks, Brown refused to say whether he'd raise taxes, which he knew would alienate many voters. Nevertheless, Brown's first budget was keyed to continuing some temporary taxes that were on the verge of expiring. "For 10 years," Brown told reporters, "we've had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the...

California has already fallen behind the revenue hopes that Gov. Jerry Brown and lawmakers used to solve the budget deficit in June, raising fears Tuesday that deeper education cuts may be in the state's future. Controller John Chiang said for the first month of the new fiscal year, California missed its $5.2 billion July general fund revenue target by $538.8 million, or 10.3 percent. To help bridge the deficit in the face of Republican tax opposition, Democrats relied on an optimistic assumption that California would receive $4 billion more than previously forecast through June 2012. Under the budget agreement, if...

SACRAMENTO -- Amid growing fears of a double-dip recession -- punctuated by the stock market's harrowing plunge -- Gov. Jerry Brown's bet on a $4 billion tax surge to bolster the state's coffers is looking illusory at best, economists say. And that means in a matter of months California's students, poor and disabled could be paying big-time for the state's gamble on a rebounding economy. Without a bull market pumping out a generous batch of capital gains, Californians can expect another round of severe budget cuts in January. Brown's "revenue projections were silly before," Chris Thornberg, founding principle at Beacon...

Gov. Jerry Brown signed the state budget five weeks ago, but the battle over spending cuts and fees rages on outside the state Capitol. In the latest bid to unravel the $85.9 billion general fund budget, advocates for doctors, insurers and low-income patients will ask federal officials in Washington today to reject $1.3 billion in Medi-Cal cuts they say will hurt the most vulnerable Californians. Cities last month asked the California Supreme Court to halt a $1.7 billion state overhaul of redevelopment agencies. Amazon.com is gathering signatures to reverse a $200 million budget bill requiring online sales tax collection. Sen....

Don’t look now, but Gov. Jerry Brown is morphing into Arnold Schwarzenegger before our very eyes. Once again, a governor has come into Sacramento promising to change the way things work in the Capitol, to make the tough decisions to make state government fiscally solvent. And once again, we are stuck with a state budget based on unrealistic revenue assumptions that avoid necessary spending cuts. You could call this the Wimpy Budget, in homage to the Popeye character who repeatedly conned everyone by saying, “I’ll gladly pay you Tuesday for a hamburger today.” Brown and the Democratic legislators have cobbled...

When governors and legislators face seemingly big budget deficits, they often turn to gimmicks to balance income and outgo on paper. The most creative have been what Capitol cynics call "rosy scenarios." The politicians conjure up some new source of revenue, swear it is legitimate and then use the projected windfall to close their gap. Former Gov. Arnold Schwarzenegger was an early advocate of rosy scenarios, such as assuming that the state could get as much as $1 billion from new gambling compacts with Indian tribes, or it could seize a half-billion dollars from punitive judgments in lawsuits. Later, he...