The Ever-Increasing Budget Deficit

by Brian Leubitz [courtesy of Calitics - Front Page]

When the Governor and the Legislature last reported in on the subject of the budget, they slashed Medicaid funding and other big expenses to get us down to a $8 Billion deficit. Turns out that was still using the Department of Finance's rosy revenue projection.  Arnold is now claiming it's more like $10 Billion:

Gov. Arnold Schwarzenegger said Thursday the state budget deficit will be "probably more than $10 billion" in the next fiscal year as the state takes in lower than expected revenues in a flagging economy.

A $10 billion gap would be at least $1 billion more than previously predicted for the fiscal year that begins July 1.

The Republican governor, addressing a district attorneys' conference in Sacramento, blamed budget formulas that lock in spending increases and a downturn in the economy related to problems in the housing market.  (SacBee 4/25/08)

Ah, yes, those damn increases that increase aid to California's most vulnerable at the pace of inflation. With rising global food prices and shortages, now is a great time to cut benefits.

Thing is, you can't separate the economy and the budget problem. Our revenue system is just too cyclically dependent upon the economy. So, yup, this is another bubble burst, so another bad deficit.

One thing that I didn't see in that article, was where Arnold mentioned how much he hated the "car tax." Specifically, how much better off California is for not having the VLF.  Because having to deal with budget deficits is waaay better than not having to slash through state services so Republicans can get some "budget reforms." You want budget reforms? How about this one: Let the majority rule!