Tuesday, September 16, 2008

78 days later: SQUANDERED CHANCE ON BUDGET – Three months late, this poor excuse for a spending plan is a waste of our time, money and goodwill.

LA Times Editorial

Tuesday morning, September 16 , 2008 -- It's tempting to tell state lawmakers, "Thanks for nothing," but that requires a generous definition of the word "nothing."

The state budget offered up Monday would have been a big goose egg for Californians had it been delivered on time, 90 days ago. Submitted now, with a quarter of the fiscal year already gone, the accord is less than zero.

Pick your Sacramento dysfunction, and this budget has it. Does California borrow too much? This budget borrows in spades, even though lawmakers would rather use words like "revenue acceleration." That's a fancy phrase for making taxpayers pay sooner -- which in turn is another way of saying we'll take next year's taxes and spend them now, without developing any ongoing revenue source or discovering any lasting cost savings. Next year, a huge chunk of tax revenue will already be gone, so we'll have to steal from the following year. All so-called revenue solutions in this budget are, in fact, one-time or temporary.

And some are even worse. Changes in the way corporate taxes are calculated may bring some revenue in now but cost the state more in the future by allowing companies suffering from a bad year to get refunds of taxes paid in good years. Perhaps the Legislature is betting there will be no big corporate losses next year because the economy is about to pick up. Lawmakers may have failed to notice that on the day they planned to vote on their budget, Wall Street was placing a very different bet.

Does California rely too much on ballot measures? This budget works only if voters approve a measure to capitalize the state lottery, borrowing (there's that word again) against future receipts. Legislative leaders say they won't get extra money from the lottery this year, and that may be true -- but this year's budget is contingent on that money appearing next year.

Do lawmakers raise the cost of government by blowing deadlines? Repeatedly. Let's take it as a given that the Legislature wasn't going to pass a budget on time, but if it had been late by just two months, instead of three, that lottery ballot measure would be before voters on Nov. 4, a regular election day. As it is, it will require a special election next year that may cost $50 million to $100 million, if the other special elections of the Schwarzenegger era are any guide.

What Californians would get in exchange for this irresponsible worry-about-it-next-year budget is, lawmakers say, no borrowing, although that's demonstrably untrue. And no tax increases -- except for the fact that many taxpayers will have to pay earlier, which will ultimately cost them because money is more valuable today than tomorrow.

Democrats avoided deeper cuts to education and Medi-Cal. But the majority party got nothing from its minority counterparts by dragging this exercise out. Republicans get to say they held the line on taxes although,in fact, they just disguised them. But the two parties did close the yacht tax loophole.

Thanks for nothing.

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