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It is deja vu all over again in Sacramento as noted in today's Bee (link here):
Sure enough, the nonpartisan Legislative Analyst's Office estimated last month that the state now faces a $20.7 billion gap between what it can expect to collect in revenues and spend over the next 18 months.
That figure includes a $6.3 billion hole for the current fiscal year, which ends June 30, and a $14.4 billion deficit in the 2010-2011 year, which begins July 1.
"And as hard as $60 billion was, closing the (new) deficit is going to be even more challenging," said H.D. Palmer, spokesman for the governor's Department of Finance, "for three reasons."
First, Palmer said, the state can't rely on another $8 billion in federal stimulus money, as it did this year, although state officials hope at least some aid from Washington will show up.
"Second," he said, "some of the solutions this year were one-time in nature, and we made that very clear."
Those "one-time" solutions included budgeting maneuvers such as accelerating the collection of payroll taxes, and postponing the last payday of state workers in the fiscal year until the first day of the next fiscal year.
Third, Palmer said, the state is scraping bottom in cutting some major spending programs because of something called "maintenance of effort."
That basically means the federal government sets minimum standards for programs such as education and social services that states must meet to be eligible for federal funds.
For example, the state must have enough money available to pay 90 percent of doctors, pharmacies and other providers of Medi-Cal services within 90 days of being billed. If it doesn't, it risks the loss of billions of federal dollars.
"As we're putting the budget together, we're mindful we are close to the bottom in a number of areas" in terms of more cuts, Palmer said.
In addition to the trio of troubles he outlined, lawmakers and the governor also must confront some legal problems.
Among them are lawsuits challenging the legality of $489 million in budget vetoes the governor made in July; disputing his claimed right to furlough state workers; disputing the "borrowing" of $1.7 billion from local redevelopment agencies; and fighting a federal court order to reduce the prison population.
The state already lost one budget-related lawsuit, when an appeals court ruled that the state illegally grabbed about $1 billion in gas-tax money meant for local transportation issues, diverting it to pay California's general fund bills.
The legislative analyst's $21 billion budget gap forecast assumes that the state will prevail in the still-active court cases. If it doesn't, the hole gets deeper.
Sure enough, the nonpartisan Legislative Analyst's Office estimated last month that the state now faces a $20.7 billion gap between what it can expect to collect in revenues and spend over the next 18 months.
That figure includes a $6.3 billion hole for the current fiscal year, which ends June 30, and a $14.4 billion deficit in the 2010-2011 year, which begins July 1.
"And as hard as $60 billion was, closing the (new) deficit is going to be even more challenging," said H.D. Palmer, spokesman for the governor's Department of Finance, "for three reasons."
First, Palmer said, the state can't rely on another $8 billion in federal stimulus money, as it did this year, although state officials hope at least some aid from Washington will show up.
"Second," he said, "some of the solutions this year were one-time in nature, and we made that very clear."
Those "one-time" solutions included budgeting maneuvers such as accelerating the collection of payroll taxes, and postponing the last payday of state workers in the fiscal year until the first day of the next fiscal year.
Third, Palmer said, the state is scraping bottom in cutting some major spending programs because of something called "maintenance of effort."
That basically means the federal government sets minimum standards for programs such as education and social services that states must meet to be eligible for federal funds.
For example, the state must have enough money available to pay 90 percent of doctors, pharmacies and other providers of Medi-Cal services within 90 days of being billed. If it doesn't, it risks the loss of billions of federal dollars.
"As we're putting the budget together, we're mindful we are close to the bottom in a number of areas" in terms of more cuts, Palmer said.
In addition to the trio of troubles he outlined, lawmakers and the governor also must confront some legal problems.
Among them are lawsuits challenging the legality of $489 million in budget vetoes the governor made in July; disputing his claimed right to furlough state workers; disputing the "borrowing" of $1.7 billion from local redevelopment agencies; and fighting a federal court order to reduce the prison population.
The state already lost one budget-related lawsuit, when an appeals court ruled that the state illegally grabbed about $1 billion in gas-tax money meant for local transportation issues, diverting it to pay California's general fund bills.
The legislative analyst's $21 billion budget gap forecast assumes that the state will prevail in the still-active court cases. If it doesn't, the hole gets deeper.
posted by City Manager @ 3:58 AM
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