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Will California's Budget Be Unbalanced In A Few Months?



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(Sacramento, CA)
Monday, July 25, 2011

When state lawmakers balanced the budget, they penciled in an extra four billion dollars in tax revenue.  But not everyone's confident that money will materialize.  Republican George Runner is on the Board of Equalization:

Runner: "This budget is probably upside down close to 5-6 billion dollars on revenues that is most likely not going to be seen."

State revenues are already about 350 million dollars behind what lawmakers were counting on.  But economist Stephen Levy cautions against making too much of that:

Levy: "Every week it seems more likely that the four billion can come in."

Levy is Director of the Center for Continuing Study of the California Economy.  He says things are looking up in Silicon Valley:

Levy: "It won't come because the California economy is in some kind of miraculous recovery, but the tech sector is large enough that it could pull off the four billion dollars itself."

Lawmakers passed so-called "trigger" cuts that would be phased in if the extra revenue doesn't pan out.  They include deeper reductions to higher education and social services, as well as chopping up to seven days off the school year. 

Strickland: "I have as much chance to start for the Dallas Cowboys as starting quarterback as those trigger cuts have of happening.

Republican Senator Tony Strickland says if revenue falls short, he thinks Democrats will re-open the budget instead:

Strickland: "The legislature is not going to allow us to cut the school year by seven days.  That's a non-starter.  They put that in their tier- trigger, but we all here in the building know that's not going to happen."

Tax revenue isn't the only unknown.  There are already lawsuits and efforts to overturn parts of the budget via the ballot in the works.  Democratic Senate Leader Darrell Steinberg says he realizes those are real risks, but he still believes the situation is better than it's been for a long time:

Steingberg: "Might we have to come back in January, sure, but I don't think it will be anything like what we have been dealing with and what the people of California have been dealing with over the past three years."

We'll know by December 15th whether any of the trigger cuts will take effect.
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