Saturday, January 21, 2012

Brown's Bulemic Budget Brouhaha

Our California governor has taken his budget road-show on the road. He's telling us he needs more of our taxes to make ends meet. Nonetheless, he's clinging to a $100 billion unfunded high-speed rail project like my grandkids taking their blankies to bed. Why is he doing this?

Although there may be others, I offer three reasons:

1. He needs the money.  It's free, with no immediate strings attached. Although in fact it will have no current impact on either the deficit or debt, it will create the illusion of a $3.5 billion state budget improvement. A Democratic victory of stupendous proportions!  The bills for this "free" money will come later, on someone else's watch.

2. He was in on the ground floor of this HSR scheme thirty years ago. It must have been in a smoke-filled back-room where deals were done and plots were hatched in order to build careers and bulging savings accounts. Now, he can't let it go. He owns it and it will be his legacy.

3. Like many politicians with famous and successful politician fathers, Brown is driven by Freudian forces to overcome perceived inadequacies by creating the biggest and best something. . . . anything.  A high-speed rail system will do to enter the pages of history.

Please, consider me generally among those happy to pay my taxes in order to obtain an effective, humane, just and productive government.

However, California's elected officials no longer give me confidence in this government and make me anxious about the dispensation of my, and that of others', taxes.  It now appears that high-speed rail is merely the tip of an extremely mis-managed State Administration iceberg.

Perhaps the single biggest complaint should be levelled at the Governor's callous disregard for education, from K through university, that will do more harm to the state's future economy than just about any other misconceived act. What is Brown thinking? Of what use is a fast train, even if built legitimately, with an undereducated next generation? Is not California's most valuable natural resource its working population? Build a useless train and eat our seed-corn?

Since he is a one-term governor, should he not stop being the captive of those special interests that benefit from and therefore reward him? Isn't this the kind of croney politics we despise when we see it elsewhere? Is it short term posturing to so aggressively pursue $3.5 billion from the DOT to satisfy the big-city mayors and other self-serving interests and create the illusion of an improved budget bottom-line?  (Those are rhetorical questions. No need for a reply.)


Brown's Budget: Fuzzy Math Again
Someone in California government has to take a math class.
By Larry Gerston
|  Saturday, Jan 21, 2012  |  Updated 2:52 PM PST

In his state of the state address last week, California Governor and new state cheer leader-in-chief Jerry Brown gushed over the "fact" that during the past year, the state's annual structural deficit was slashed to $5 billion from $20 billion.

As a result, the governor beamed, a balanced budget is in sight.
Bravo, except the numbers don't add up.

Just weeks ago, the nonpartisan state Legislative Analyst estimated that the deficit on July 1, 2012, at the beginning of the new fiscal year, would be $13 billion. The governor's office replied that it would be "only" $9 billion.

Either number is a lot more than $5 billion.

Add to those numbers the report by state Controller John Chiang that as of Dec. 31, halfway into the current fiscal year, the difference between expected revenues and expenses were $2.5 billion, suggesting an end of the year deficit of about $5 billion.

That's $5 billion on top of the numbers offered by the governor and LAO for the coming year.

Combined, these numbers represent an overall imbalance on July 1, 2012, of somewhere between $14 billion and $18 billion, considerably more than the governor's claim.

All this is disconcerting enough, but the problem only grows worse given the governor's desire to spend more on public education [?], the Bay delta, high speed rail, and numerous other public policy areas.

How can all these things occur, given the state's continuing massive deficit?

Brown says that most of the problem will go away if the voters pass his bundle of temporary taxes in November, which would bring in as much as $7 billion annually. But $7 billion is a long way from a gap of $14-$18 billion.

To repeat, the numbers don't add up. No wonder the public is so skeptical of state policy makers.

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