Getting the Facts Straight on the Budget Crisis

Governor-Elect Jerry Brown convened a budget forum this morning to discuss the budget situation with the purpose of reaching consensus on the facts related to the budget crisis. “We can’t come to agreement if we don’t have a consensus on the underlying facts,” he said, “then we can discuss full range of solutions.”

The facts, as presented, included the following bullets (a full set of slides are available on Jerry Brown’s website):
* The biggest General Fund expenditure is Education, with 30% going to K-12 Education and another 10.6% going to Higher Ed. Health Care is next at 22.3%, followed by Human Services at 10.8%.
* 71% of all General Fund goes toward local assistance.
* The LAO’s projected deficit is $25.4 billion, with an additional potential loss of $2.7 billion (as a result of the proposed action in Congress now pending around the Estate Tax), which would result in a total deficit of $28.1 billion.
* Without revenue growth or ongoing solutions, deficit will persist. Full recovery from the recession could take up to 8 years.
* Recent budget solutions have been temporary or never materialized. In the last 3 years 74%, 84%, and 85%.
* California’s credit rating is the lowest of all states, and is at risk of further down grading as a result of the structural problems with our budget process.
* We could face another cash crunch as early as July.
The complete presentations by Governor-Elect Brown, Treasurer Lockyer, and Controller Chiang can be found here. On the dais was also Senate President Pro Tem Darrell Steinberg, Assembly Speaker John Perez, and Assembly Minority Leader Connie Conway. Senate Minority Leader Bob Dutton was in attendance, but in the audience and not on stage.
Following the presentation of facts, which Brown called the worst budget yet, there were a series of questions and answers. But there is no question that this is going to be a gruesome budget.
Assemblyman Bill Monning drew applause when he asked about potential revenue sources. Brown deferred to the others on the dais and Speaker Perez suggested putting the Oil Severance Tax and the Income/Sales Tax Swap back on the table. Representatives from counties asked questions about realignment.
In concluding the forum, the Governor-Elect acknowledged the hard work ahead but expressed confidence that if we all work together, and everyone gives a little, we can get the state back on track. “Everything should be on the table,” he said, “and everyone should be at the table to talk about it.”
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