Now that the June Primary is over, all eyes now turn to the
November election. In California, the biggest issue on the
ballot will be whether to raise taxes to help close the state's
chronic budget gap. That deficit has nearly doubled since the
start of the year - and it's now nearly $16 billion. So how'd
the budget grow so big?
The biggest reason for the deficit surge is the state planned
on a whole bunch of money it didn't get. Now, you might think
there's a pretty simple explanation for that …
Three different voices each say:
"It's the economy, stupid!"
But actually, just about everyone agrees … it's not.
First of all, taxes on capital gains and corporations came in well
short of projections. Here's how Democratic governor Jerry
Brown explained things a couple of weeks ago:
Brown: "The capitalist system is
not coincident with your expectations of exactitude. It
doesn't play like we may want it to."
But the governor and legislative Democrats did project an
extra four billion dollars in revenue in last year's budget.
From the start, Republicans called it wishful thinking.
Senate Minority Leader Bob Huff:
Huff: "There were unrealistic
assumptions made last year. Obviously, the most notable was
the $4 billion that magically appeared when they were that far
apart from closing the budget."
Beyond the revenue, there were other problems. Federal
judges and the Obama Administration rejected some health and human
services cuts. And it turns out schools are owed more than
originally thought, thanks to the state's incredibly complex
education funding formula. Here's Governor Brown:
Brown: "The budget has hundreds
of funds. We have lots of restraints and rules and figuring it out
is not just showing up and saying, okay, we got an $8 billion gap -
let's start cutting like someone in business. It's a pretzel
palace of incredible complexity."
… a palace that now has a gaping hole ripped right through
it.