Do I Hear 20? Going Once...

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If you're one of those folks who are following the latest discussions about the fiscal troubles of the state, a word of advice: believe everything. Or nothing. Or something in between.

Spending and revenue estimates in Sacramento are always like the latest fad in fashion... they come and they go. They're hip one day, tragically dated the next. That's been true for years, way before Governor Schwarzenegger took office.

But few other chief executives have sparked so much chatter... and offered so many estimates about the budget... in so few days.

The latest guesstimate came on Monday, when Schwarzenegger told an audience in Garden Grove that the state budget is "$20 billion out of whack." That would lead to a budget crisis second only in magnitude to the shortfall that helped spark the recall of former governor Gray Davis in 2003.

As of yesterday, the official word was that the governor was "speaking rhetorically." Might that then mean that the governor's numbers aren't necessarily rooted in reality? After all, my handy Webster's Dictionary offers one definition of rhetoric as "the use of exaggerated language; bombast."

But today, Capitol reporters were told that the number could, in fact, be real.

"[Schwarzenegger] has internal estimates" that show as much as an additional $10 billion in budget red ink, according to gubernatorial press secretary Aaron McLear. "That's why we need to start working on this now."

McLear declined to reveal any more about those internal projections, though may have more later on whether this is a lack of revenue, an abundance of spending, or both.

But he did lay out a rationale for how you'd get to $20 billion:

The governor's budget team believes that as of this winter the state faced a $7.4 billion deficit in fiscal year beginning in July, down from $16 billion and thanks to a series of possible money saving proposals were enacted. Add to that $2.8 billion, says Schwarzenegger spokesman McLear, for the governor's desired rainy day fund. Then add on the still nebulous $10 billion in new problems... and you get pretty close to $20 billion.

Of course, the rainy day fund isn't really part of the deficit... i.e., an actual shortfall in revenues or an abundance of mandatory expenditures. Take that out and the governor's new number maxes out at a little more than $17 billion.

Now, the caveats. We're still waiting for a clearer picture of revenues. And while the April 15 checks are still being totaled over at the Franchise Tax Board, there's new word that things might be looking better than (or not so bad as) expected. That, however, is only one piece of the revenue pie: there are also corporate tax revenues and sales tax revenues that figure into the issue.

But if the deficit projections start inching toward the big two-oh, it's hard to see how even the governor's 10% across-the-board cuts (strongly opposed by Democrats) would erase the problem. And yes, that probably brings us back to a debate over some kind of a ____ increase.

You can fill in the blank, can't you?

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About John Myers

John Myers is senior editor of KQED's new 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. In 2014, he was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.

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