Arnold's Unbalanced Budget
Surprise, surprise, Arnold's budget isn't balanced. The Sacramento reporter's favorite number source, Legislative Analyst Elizabeth Hill, came out with her report on the governor's budget. She doesn't buy what Arnold is selling, to the dune of a $2.6 billion shortfall. We do have some reserve cash left over from the current fiscal year to minimize the blow, but Arnold's plan is still short $726 million.
That's a far cry from Schwarzenegger's bold statement in January that his budget had wiped out the state's red ink.
Beyond that, the LAO report forecasts an even larger deficit in 2008-09 of $3.4 billion, and slightly smaller deficits throughout the rest of this decade.
There are several differences between Hill's lengthy report and the governor's own fiscal projections. But one of the most easily digestible may be this: the LAO says Governor Schwarzenegger's team has overestimated revenues in the coming year by a whopping $2 billion. The big difference, says Hill's report, is that her analysts think personal income tax revenues will be "weaker" than projected by the governor.
These are of course predictions, but Hill is a trusted non-partisan source. The full report is available here, for all of those number geeks out there.
Bob Salladay has a few more highlights from the report:
- Unfairly increases fees for students at the University of California and Cal State universities by 7% and 10% respectively, when expenditures are increasing only 2.4%. But Hill agrees that the method of setting CSU and UC faculty salaries is based on a "misleading" methodology and should be changed.
Arnold is attempting to balance the budget on the backs of UC and CSU students. There is no reason to have increases that high, when expenses are not increasing at the same rate. The expenditure growth rate provides another strong argument for a fair contract between the California Faculty Association and the state. After watching years of huge tuition increases and massive executive's pay hikes, it is past time to bring CSU faculty's compensation into line with similar institutions in other states. (See SpeakOut for more on the issue)
- Spends too much money on building prisons, which could lead to "surplus capacity."
Bricks and mortar are around for a long time. Hill contends that Arnold is proposing to build more prisons than we will need years down the road. We are facing a massive overcrowding now, but we may not need to house the same number of inmates years down the road.
- Unfairly cuts $160 million to fix state parks, especially since California's parks already have a $900 million list of broken toilets, torn up trails and other problems.
My aunt has worked for State Parks for a long time. Every year it seems like they face more and more drastic cuts, sending the parks into further disrepair. The number of parks she is in charge of has increased exponentially and it is always a battle to get maintenance funding for anything. Arnold's budget would exacerbate an existing disaster. Our state parks need basic attention, so that we can all take advantage of our increasingly diminishing wild spaces. Delaying maintenance means the expenses of repair go up as does the damage by humans to the space.
The legislature will use Hill's analysis to inform their decisions on modifying the budget. Tough choices will have to be made, but without Arnold's rose colored glasses on.