May Revise: Pennies From Heaven

Comments Off on May Revise: Pennies From Heaven

Most of the budget press conferences in the Arnold Schwarzenegger era have sounded like a lesson in tough love... tighten the belt, can't spend what we don't have, live within our means, etc.

But today it was more like when the doorbell rings, and it's that guy from Publishers Clearing House holding a great big check. Surprise!

Schwarzenegger made official what had been chattered about for weeks: state revenues are up, way beyond expectations. He pegged the total "extra" revenue at $7.5 billion. Most of that ($4.8 billion) will be counted towards the current budget year, with the remaining $2.7 billion counted towards the fiscal year that begins on July 1.

(Interestingly, those above numbers are just what's extra from January's revenue estimates. When reporters asked the governor's budget director, Mike Genest, how much "extra" cash there was from 2005-2006 revenues projected last May, the answer: $8.1 billion. Wow.)

Given that we already knew he would pay off the education IOU, etc., a few new details for now:

* The documents actually show a deficit of $6.1 billion dollars in 2006-07-- an imbalance between revenues that will come in for that period, and expenditures that will go out. But the governor says all but $2.5 billion of that deficit is actually one-time expenditures, like debt payments. In fact, he and his team are calling the $2.5 billion remaining shortfall the state's net deficit, a new term of art for budget watchers.

* The governor is proposing a one-time payment of $400 million for local health officials to prepare for any kinds of emergencies, such as avian flu.

* Schwarzenegger proposes setting aside enough cash to raise the total amount in the "rainy day" reserve fund to $2.2 billion.

"A budget is all about values," he said. "It's an expression of who we are, and what we really care about."

RSS Subscribe

About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.

Comments are closed.