State Analyst Pans Arnold's Budget

The non-partisan Legislative Analyst, known as the "budget nun" has reinforced what I and most other progressives have been saying: Arnold's budget is a terrible proposal and the solution to our budget deficit is to increase revenue. LAT:

The state's chief budget analyst warned Monday that Gov. Arnold Schwarzenegger's proposals for closing a $14.5-billion budget gap fail to properly prioritize how the state should spend its money, use questionable accounting methods and would be unnecessarily disruptive to schools and community colleges.

Schools in particular need stable funding levels. They cannot easily expand or contract their budgets. Teachers must be hired in advance, supplies must be ordered. That is why Prop. 98 was passed in the first place, insulating them from the ups and downs of our state's finances.

Legislative Analyst Elizabeth G. Hill, whom Democratic and Republican legislators look to for unbiased advice on fiscal issues, is particularly critical of the governor's plan to spare almost no agency or program in calling for state spending to be cut immediately by 10%.

"It reflects little effort to prioritize and determine which state programs provide essential services or are most critical for California's future," Hill wrote in a report released Monday morning. She also said the proposed spending plan cuts too deeply into state services, and she called on the Legislature to offset some of the governor's suggested reductions by raising fees and taxes or by scaling back existing tax breaks.

California has a revenue problem. Our state bonds are being downgraded, making it more expensive if not impossible to borrow our way out of this problem.

Soon after Hill released her report, a major bond rating agency put the state on notice that it was at risk of a downgrade. Fitch Ratings, expressing concern that the Legislature would balk at the steep cuts advocated by the governor, said failure to take action to balance the budget soon could lead to a downgrade of California's rating on approximately $43 billion of outstanding debt.

Administration spokesman H.D. Palmer said the Fitch warning "is as clear a statement as I have seen that there will be consequences for inaction."

If the governor had actually chosen a responsible path, instead of direct confrontation with the Democratic controlled legislature there would not be these fears. Instead he picked the least acceptable path and set us on a path for major conflict not resolution. That is all on the governor.