By Dan Walters
dwalters@sacbee.com The Sacramento Bee
Published: Sunday, Jan. 16, 2011 – 12:00 am | Page 3A

Ever since California’s economy cratered, the Capitol’s politicians have rationalized their corrosively expedient decisions on the state budget – refusing either to permanently raise taxes or cut spending – by hoping that economic recovery was just around the corner.

Newly inaugurated Gov. Jerry Brown is having none of it. His proposed budget assumes that California will be experiencing hard times for years to come, even though the recession officially ended in 2009.

California has lost well over a million jobs in the last few years as the unemployment rate soared to over 12 percent.

“The state is forecast to recover the nonfarm jobs lost during the recession in the third quarter of 2016,” his budget says, “or approximately 87 months after the end of the recession.”

As dour as that sounds, it may be more optimistic than the likely reality. California’s population, and thus its potential work force, are continuing to grow. The state needs roughly 200,000 new jobs a year to soak up that work-force growth, so even were it to regain those million-plus lost jobs by 2016, it could still have a high jobless rate.

Nevertheless, Brown has opted for a five-year recovery time frame. That explains why he wants a five-year extension on about $8 billion a year in temporary tax increases that were enacted two years ago and are now expiring.

Most of the additional revenue would, under Brown’s plan, be diverted to local governments, especially counties, to finance a series of programs that the state would shift into their purview.

If, however, the “realignment” is to be permanent, as Brown envisions, how would the locals finance those programs once the five-year tax extension expired in 2016? When asked that question last week, the governor was clearly stumped, finally muttering something about the state’s continuing to provide financing – on the assumption that the economy would have recovered by then and the state’s tax system would be generating billions in additional revenue.

Local officials refuse to accept such a vague promise and demand ironclad guarantees of continued financing, but uncertainty clouds the longer-term economic picture.

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