Here is a ‘must read’ initial analysis by Dan Weintraub of the Sacramento Bee, from his blog (he is NOT a big fan of this budget):
The other day the governor fell off his motorcycle. Today he fell off the wagon. The budget-balancing wagon, that is.
Schwarzenegger had been making slow if not spectacular progress in balancing the state budget since he took office in the fall of 2003. The structural gap between spending and revenues estimated for the coming year shrank from about $16 billion when he took office to less than $4 billion, and a balanced budget was actually in sight. But his proposal today would spend $7 billion more next year, while the state’s revenues are expected to increase by just $4 billion. He has stopped making progress. Now he is going backwards.
The governor is proposing to spend about $98 billion next year while revenues are expected to total $91.5 billion. He would cover that gap with money left in the budget by what is believed to have been a one-time windfall of tax payments. Then he would run for re-election, roll the dice and hope for the best.
Now there are some caveats on the governor’s side. The gap described here is inflated by the inclusion of $460 million he is by law required to set aside for early repayment of a portion of the deficit bond voters approved in March 2004 at his urging. It also includes $920 million he would use to repay a transportation fund created by voters which he earlier used for general purposes.
The entire column is here. Prepare to concentrate, it is a little long – but very insightful. When you are done, note the correction from the Governor’s Finance Director here (and also see projected deficits going out a few years…yikes!).
We’ll see what other experts say about the budget as they do their analysis – but Weintraub has a pretty sharp eye and good mind…