One “trick” is to bump payroll expenses by one day, from June 30 to July 1, to make them a fiscal year 2011 expense, when revenues might be flowing better. “This is a paper savings of $1.2 billion which in my mind is clearly a gimmick… How are you going to make up for that unless you do it every year?” asks Jessica Levinson, director of political reform for the Center for Governmental Studies.
Another move is to withhold more taxes sooner from state paychecks – even if the money must be paid back, it generates a temporary increase in cash flow.
The legislature couldn't even be bothered to fully pretend to close the gap. Did they lack imagination? Couldn't they come up with some other fantasy phantom revenue sources?
Because the Assembly failed, however, to approve measures to borrow gas-tax revenues from local governments and on oil drilling, the Legislature handed Gov. Arnold Schwarzenegger a budget that falls short by $1.1 billion of being balanced.
Scwharzenegger said he would make line-item cuts in the next few days to make up for the gap, but lauded lawmakers for taking on the painstaking job.
The plan erases about $23 billion of the $26.3 billion gap that Gov. Arnold Schwarzenegger's finance experts projected through June 2010.
They really need Schwarzenegger's proposed $2 billion buffer because the odds of further economic contraction and further decline in state tax revenue seem pretty high to me. But the Democrats are hoping for the best. Hope is not a prudent foundation of good government.
Pedro Nava led the effort to prevent more oil drilling off Santa Barbara that could have brought in more revenue. I personally wouldn't mind the drilling since I rate the accident risks at this point as pretty low.
The plan to allow off-shore drilling at Tranquillon Ridge, expected to bring $100 million to the budget solution, passed in the state Senate 21-18 early Friday morning.
But it was voted down, 43-28, in the Assembly after a series of highly charged speeches by Democratic lawmakers who recalled the environmental devastation of the 1969 Santa Barbara oil slick.
Since these Democratic lawmakers do not want to totally swear off use of oil in their own lives they just expect to make people in other parts of the country and world deal with environmental threats from oil extraction. Make other people pay for it. That's the foundation of the Democratic Party.
|Share |||By Randall Parker at 2009 July 26 01:42 PM Politics Money|