Treasurer Lockyer speaks on the trigger…

Some more news on the infamous “trigger…”

To recap: the 2009-10 budget is bad, but it is far worse depending on a joint decision by the State Treasurer Bill Lockyer and Governor Schwarzenegger’s Director of Finance Mike Genest. They need to detemine by April 1 whether California’s general fund will receive from the federal stimulus package at least $10 billion by the end of the 2009-10 fiscal year.

If that determination is made, it will trigger the elimination of nearly $1 billion in health and human services reductions (including eliminating dental and other Medi-Cal benefits, cutting public hospitals, SSI/SSP, IHSS, and CalWORKS) and $1.8 billion in personal income tax increases, currently in the budget and scheduled to take effect on July 1, 2009.

After Director Genest preliminarily suggested that we would not meet the threshold, and thus trigger the cuts, State Treasurer Bill Lockyer weighed in this afternoon regarding the estimated California share of federal stimulus dollars contained in the “2009 Budget Act Package” released today by the Governor:

“Any speculation about whether budget cuts or tax increases will ‘trigger off’ as a result of the federal funds determination is premature. The Governor’s enacted budget presentation today includes an estimate of $7.8 billion in federal assistance. I understand this figure is the Administration’s preliminary estimate, and not by any means a final calculation. In arriving at any official determination of the actual funds available, I will make an informed and independent decision only after we have completed a full review and public hearing.”

There’s questions about what federal funds “count” to meet the threshold, and how the formulas work. There’s a lot riding on that analysis and decision.

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