Brown Announces Some, Not All, Budget Trigger Cuts

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KQED/John Myers

California's Latin-fluent governor, as he likes to do, invoked the ancient language when asked what he would say to millions of the state's citizens impacted by about $1 billion in automatic, and immediate, budget cuts.

"Nemo dat non habet," said Governor Jerry Brown in a Capitol news conference. "It means, 'No man gives what he does not have.'"

And with that, Brown's administration pulled the trigger (or, perhaps, declared the pulling... you be the judge) on almost $981 million in state budget spending -- from higher education to child care subsidies to juvenile justice and beyond.

"We're pulling our budget into line," said the governor in discussing the cuts (PDF) -- cuts which were written into the June budget agreement to be entirely dependent on (and thus "automatic") projections of state revenues for the 12-month fiscal year that ends on June 30, 2012.

That revenue estimate, according to Brown's economists, is $2.2 billion below what was written into the state budget. That may sound gloomy, but it's substantially better than last month's projection by the Legislative Analyst's Office of a $3.7 billion gap between the budget and reality.

The budget language mandating automatic cuts in such a scenario says whichever forecast -- the governor's or the LAO's -- is most optimistic wins... and so the automatic cut list is smaller than many expected.

Brown's budget director, Ana Matasantos, told reporters that the difference in forecasts is largely explained by her team having new data since November -- data showing, she says, better sales and income tax receipts -- and a different viewpoint on federal tax law changes being contemplated in Washington, i.e. a final outcome more advantageous to the state's revenues.

One thing is clear: the trigger cuts won't be stayed by any emergency gathering of the Legislature. Not only has the governor resisted such suggestions, but legislative leaders have also nixed the idea on the grounds that there's no consensus on any sort of Plan B.

"The trigger is the trigger," said Senate President pro Tem Darrell Steinberg at a Capitol event before the governor's announcement. "It's already been legislated."

It's important to remember that the "trigger cuts" provision in last summmer's budget emerged as a demand of Governor Brown in the handful of days between his veto of the first budget sent to his desk and his signature on a revised spending plan on June 28. Even so, Brown took a fair amount of flack for agreeing to revise upward revenues by $4 billion, a concession seen by some as yet another chapter in the book of state budget gimmicks.

I asked the governor in his Capitol event whether, in retrospect, he wishes he hadn't agreed to that rosier revenue projection and had pushed for a more conservative estimate. He said, in fact, he feels just the opposite.

"At least we got half the revenue," he said. "By and large, it was much wiser to assume the $4 billion than to make $4 billion in cuts. That would have been immediate devastation to many."

And yet, he admitted that revenue forecasting is -- at best -- inexact. "To some extent, it's prophecy," said Brown.

That prophecy also must struggle with what has become a staple of California budgets: lawsuits. There's already a temporary restraining order that could block the 'triggered' $100 million cut to In-Home Supportive Services. Add to that a federal challenge to existing health care cuts and, as we're now hearing, a likely lawsuit to block the biggest 'triggered' cut to K-12 schools -- a $248 million cut in school transportation funds.

Republicans, when they weren't jabbing Democrats Tuesday for rejecting GOP budget ideas back during the legislative session, tried to capitalize on the next big question: the political battle ahead over Governor Brown's $7 billion sales/income tax hike initiative?

"Lost in the slick sales pitch for higher so-called temporary taxes is the fact that our tax revenues are up over last year," said Sen. Bob Huff (R-Diamond Bar) in a written statement. "Raising the tax rates at a time our state is struggling to emerge from a recession and high unemployment is not the answer, and will strangle our recovery."

The governor mused during his Q&A with the press about the upcoming 2012 electoral challenge, taking great pains to admit that it won't be easy. He also, when prompted (by me), ventured into the greater debate into which his tax initiative will swirl: the fight over economic equality issues, sparked by the Occupy movement, and how that jibes -- or clashes -- with the default position of many Californians to oppose taxes.

"I think the inequality fuels the demand for more spending," he said. "And that's why the only tax that's overwhelmingly popular is the [proposed] tax on wealthier people."

Brown admitted his first challenge is to, as many have said, try and clear the field of other potential tax increasing initiatives -- a process he said he has begun, but one on which he admitted he still has work to do. And only then, it seems, can he present some sort of political and policy coalition for his own proposal... all while also trying to hold together Democratic factions who will no doubt hate the 2012-13 budget proposal he unveils in less than a month.

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About John Myers

John Myers is Sacramento Bureau Chief for KQED Public Radio and "The California Report," heard daily on 23 public radio stations across the Golden State.

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