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Saturday, Nov. 21, 2009

The Stockton Record: Compounding our pain

Earlier this month, Gov. Arnold Schwarzenegger predicted a state budget deficit in the coming fiscal year between $12.2 billion and $14.4 billion. It turns out he was off by at least $6 billion.

The nonpartisan Legislative Analyst's Office said this week that the state faces a shortfall of about $20.7 billion.

The budget news gets worse by the day, and there's no reason to believe the LAO's forecast will be any more accurate than Schwarzenegger's. And we're two months out from when the governor releases his spending plan for fiscal 2010-11.

That means the deficit will only grow larger. Looming is a legislative fight every bit as protracted and bloody as we witnessed during the most recent round of budget battles, and we should prepare for solutions -- assuming lawmakers have the political will to find them -- that are even more painful.

Legislative Analyst Mac Taylor doesn't mince words, attributing much of what we face "to the state's inability to implement several major solutions in the July 2009 budget plan."

They include:

"The expected inability of several programs -- in particular, the prison system and Medi-Cal -- to collectively achieve billions of dollars of spending reductions assumed in the 2009-10 budget.

"The expected inability of the state to sell the State Compensation Insurance Fund (SCIF), a quasi-public workers' compensation insurer, for the budgeted amount of $1 billion in 2009-10.

"The state's loss of a court case that makes the General Fund unable to benefit from over $800 million in transportation funds in 2009-10.

"A nearly $1 billion increase in the Proposition 98 funding guarantee for K-14 education in 2009-10."

Meaning the accounting gimmicks in the wink-and-nod budget the Legislature finally cobbled together in February were just that: gimmicks. Rather than doing what had to be done then to address the state's problems, they put them off. Yet those problems didn't go away.

"Addressing this large shortfall will require painful choices -- on top of the difficult choices the Legislature made earlier this year," the LAO said with ringing understatement.

Already, Republicans are saying no new or higher taxes; Democrats are saying no more cuts. If it seems you've heard that before, it's because you have. This is the same political posturing that failed us in the past and, if it continues, will fail us in the future.

There are no easy solutions left. There were no easy solutions during the last budget go-round. Easy solutions were all used up years ago. And even if the economy were to experience a miraculously strong and quick recovery, we still face years of repairs to restore what we had -- if we ever can.

In good times, these flaws are almost invisible. In bad times, they are irritating. In crisis times, they make governing California nearly impossible.

That will be demonstrated again when Schwarzenegger releases his budget in January.