Posted on 06/13/2006 8:56:14 AM PDT by NormsRevenge
Give the legislative conference committee working on the state budget a mixed grade: The panel, dominated by Democrats, ended work this weekend on a budget plan that both improved and weakened the governor's budget proposal.
That leaves Democrats, Republicans and Gov. Schwarzenegger still negotiating a final budget plan for fiscal year 2006-07. And after several years of covering state deficits with gimmicks, luck and accounting tricks, the state needs a plan that honestly balances spending with revenue.
The governor's revised 2006-07 budget plan, which Schwarzenegger issued last month, would leave the state with projected deficits of $3.5 billion a year in the next two years and diminishing shortfalls in later years. Republicans say the Legislature's budget would add $1.5 billion to that deficit in 2007-08 -- hardly a fiscally responsible move.
Democrats, for example, opted to take $350 million in revenue from the sales tax on gasoline to spend on mass transit projects. The governor wanted to use that money to pay down debt on existing transportation bonds -- a wise idea, given that the state in November will ask voters to approve nearly $20 billion more in transportation bonds.
Yet the Legislature's budget also makes some sensible improvements on the governor's proposal. Schwarzenegger planned to use $1 billion to pay off the 2004 Prop. 57 deficit bonds a year early. But the early repayment of the deficit bonds would not provide a financial boost until 2009 -- and the biggest shortfalls will hit before then. The Legislature wisely followed the state legislative analyst's advice and would put the money toward paying down debts that come due sooner.
The Legislature also scrapped the governor's plan to earmark about $1.2 billion in education spending for purposes ranging from classroom supplies to art and music equipment. Legislators propose giving local schools more say in spending the money. Fine. Local schools know what they need; the state may not.
Some legislators predict the Legislature may even pass a budget by the June 15 constitutional deadline for the first time since 1986. But legislators and the governor should be far more concerned that the budget be fiscally sound, no matter when it arrives.
How can they end up with something sound when both the Dem majority and the Gov have proposed a $7 Billion structural deficit?
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