Thursday, December 16, 2010

Immodest budget proposals for a broken California

Once and future California governor Jerry Brown is trying to get a jump start on the Sisyphean task of fixing the state's broken budget.

Is California's budget the most broken among U.S. states? The Wall Street Journal reported last week that "States are reporting billions in midyear budget shortfalls, and the crunch is likely to continue for at least several more years, a new report says. [...] Illinois had the largest midyear shortfall relative to the size of its budget among the 15 states with deficits: $13 billion, or 47% of its general-fund budget."

Let's look at how California is grappling with its fiscal nightmare.

On Wednesday of last week, the SF Chronicle reported, "Gov.-elect Jerry Brown convened an unusual summit Wednesday, bringing together lawmakers and state financial officials for an in-depth look at the state's myriad fiscal problems, and he signaled that the days of relying on gimmicks to bridge the budget deficit are over."

Just the day before yesterday, the Chron's columnist Kathleen Pender wrote about one of a depressing number of those budgetary gimmicks that was baked into the 'resolution' of the 2010-11 budget this past fall. As Pender wrote in Loss of estate tax leaves hole in state budget: "The proposed tax deal in Congress would fail to deliver about $2.7 billion in estate tax revenues California was counting on receiving this fiscal year and next, but some say the state should never have expected those revenues in the first place. 'It sounds like your budget estimators were counting chickens that not only hadn't hatched, the eggs hadn't even been laid yet,' says Howard Zaritsky, an attorney and estate planning consultant in Rapidan, Va."

It's not like this was a surprise. As Reuters reported the day the budget was passed, "California lawmakers on Friday approved a state budget filled with spending cuts and creative accounting to fill a $19.1 billion deficit, 100 days after a spending plan should have been in place. Governor Arnold Schwarzenegger said he hoped to sign the budget package as soon as Friday evening, but critics fear his successor, to be elected on November 2, will immediately face a new shortfall as rosy revenue assumptions prove unfounded."

Creative accounting. California's government has been pretty good at that over the past decade. But maybe a new kind of creativity is called for to climb out of the deep deep budgetary hole that we citizens permitted our governator and legislature to dig.

As Brown summited last week, I was hanging out with an old friend on his last day of a visit back to the Bay Area. Stuart lived in Berkeley and Oakland in the 1980s and 1990s, between Brown administrations. He reeled off a range of options the new governor might consider, and has kindly permitted me to spin them in this post.

These ideas are not gimmicks. They've been tried and proven in many a Third World country, and the last has even been piloted here in the U.S.

And so, without further ado:

1. Call in the IMF

The IMF is great at restructuring economies, and because California's is the 8th largest in the world maybe it'd be a fun challenge for the intrepid imposers of austerity measures. Heck, with a hole $28 billion deep, austerity measures are exactly where the state's going anyway.

2. Invite Bono to organize a charity concert

George Harrison and Ravi Shankar did it for Bangladesh. Bono organized Live 8, and was part of Band Aid and played at Live Aid.

What would Bono call a charity concert to save California? "Kool Aid"? "Anti-tax crusAid Aid"?

Maybe Linda Ronstat would play if her former boyfriend asked really really nicely.

3. Apply for AIDS funding from the United Nations

Why not? California has been home to nearly 15% of the 1,073,124 HIV/AIDS diagnoses in the United States (cumulative through 2008). Yes, it's true that there are currently about 33 million people living with HIV (not cumulative, current) ... a staggering number ... but still, it couldn't hurt to ask UNAIDS, right?

4. Beg Hugo Chavez to subsidize the state's oil habit

Venezuela's 'revolutionary' leader has given a break to Honduras, the Dominican Republic, Cuba, Costa Rica ... he even sold oil cheap to "poor populations and low-income populations" here in the U.S., quoting from his announcement of the plan, on Democracy Now (20 Sept 2005). The Washington Post described one part of that program as an effort to "bring 7.5 million gallons of deeply discounted heating oil to as many as 37,000 low-income households in Maryland, Virginia and the District and free heating oil to some homeless shelters."

Sounds like just the ticket. Go on, Gov.-elect Brown. Ask Mr. Chavez. Please, please, pretty-please?

I suppose it's best to close on an amusing note -- you know, amusing in a gallows-humor kind of way. Here's a thought from that SF Chronicle article of last week:

"Mac Taylor, the state legislative analyst who joined Brown at the forum, said any real fixes would be difficult. 'No matter how you resolve the budget problem ... it's not going to have a good effect on the economy,' Taylor said."

No sh*t, Sherlock.....


  1. Hugo Chavez? Well. OK. It's time California had a foreign policy. Couldn't be any worse than the feds.

  2. I think we should sell naming rights to the days of the week. Monday, for example, could be sponsored by Apple, as in "Macintosh Monday". "AT&T Tuesday" could probably fund the public schools. I'll talk to the McDonald's folks about springing for "Friesday".

  3. @Glenn: Sure, if Berkeley can enact foreign policy, why not the state?

    @Richard: Brill. That would be a perfectly fitting response by the California legislature: selling something we don't own goes great with counting on all the other fictional sources of revenue on which this past fall's budget was "based."