Calif. Gov. Jerry Brown released his proposed budget for 2013-14 Thursday, increasing education spending while having an extremely optimistic outlook of California’s economic future.
What’s getting most attention (because the increased spending and rosy outlook were already gimmes in the reporting of the state’s economy), is Brown’s declaration that the state’s budget deficit – estimated at well over $20 billion just last summer – was all but gone.
Not getting as much reporting (in favor of pretending the state has faced deep-to-the-bone cuts) is that the state’s deficit is being turned into debt. To be fair to Brown, though, he’s not ignoring it in his budget summary (pdf):
The state’s budget challenges have been exacerbated by the Wall of Debt—an unprecedented level of debts, deferrals, and budgetary obligations accumulated over the prior decade. In 2013‑14 alone, the state will dedicate $4.2 billion to repay this budgetary borrowing—paying for the expenses of the past, instead of meeting current needs. Moving forward, continuing to pay down the Wall of Debt is key to increasing the state’s fiscal capacity. In 2011, the level of outstanding budgetary borrowing totaled $35 billion.
Brown is also aware in the report that California’s upcoming recovery is based mostly on projections that may turn out to be a bit too optimistic. California is also participating in the Affordable Care Act’s Medicaid expansion, and rising health care costs are noted as a potential budget buster. The budget adds $1.2 billion to state Health and Human Services agencies. Even California is waking up to the possibility that the Affordable Care Act might not actually make care more affordable.
While Brown may give good lip service to the state “living within its means” in speeches and in his summary, the high-speed rail plan still lives. The funding for the initial segment in the Central Valley has already been budgeted and is expected to begin construction later this year. Brown has proposed in the past using the money the state was hoping to get from its upcoming cap-and-trade auctions to possibly help fund the train’s $68 billion price tag. He is still proposing using cap-and-trade revenues in his latest summary to help fund the train. And that’s a problem, because the first auctions in November brought in a grand total of $55 million to the state. The state was expecting to rake in $1 billion in its first auction. $55 million won’t even get the union workers who will be guaranteed all the jobs building the train out of their beds.
Calling for fiscal responsibility while pushing this boondoggle is the equivalent of President Barack Obama insisting the federal government has more important problems than marijuana users while the Drug Enforcement Agency continues raiding legally operating pot dispensaries. If the economy doesn’t improve as projected, California is hosed. If the economy does improve, Californians can enjoy watching their revenue get thrown away at absurd, ego-driven, crony-enriching public projects.