By Dan Walters
Published: Tuesday, Jun. 28, 2011 – 12:00 am | Page 3A
When governors and legislators face seemingly big budget deficits, they often turn to gimmicks to balance income and outgo on paper.
The most creative have been what Capitol cynics call “rosy scenarios.”
The politicians conjure up some new source of revenue, swear it is legitimate and then use the projected windfall to close their gap.
Former Gov. Arnold Schwarzenegger was an early advocate of rosy scenarios, such as assuming that the state could get as much as $1 billion from new gambling compacts with Indian tribes, or it could seize a half-billion dollars from punitive judgments in lawsuits.
Later, he counted revenues from peddling the state’s workers’ compensation insurance business and state buildings. His rosiest scenario occurred last year, when his initial budget assumed that the federal government would give the state as much as $7 billion in extra cash.
None of those funds materialized, but that doesn’t prevent Capitol politicians from dusting off another rosy scenario.
Gov. Jerry Brown and Democratic legislators, whose hopes of winning Republican support for tax extensions vanished, ginned up a new budget Monday, just days before the 2011-12 fiscal year is to begin.
Brown vetoed one Democratic budget, saying it was so gimmicky that Wall Street bankers would not give the state billions of dollars in short-term operating loans. And Controller John Chiang followed that by decreeing that since a balanced budget wasn’t enacted by the constitutional deadline of June 15, he’d cut off legislators’ salaries and expense payments as a new state law requires.
Brown and Democrats went back to the budgetary drawing board, and a new rosy scenario emerged – that above-expectation tax revenue this year means the state will collect an extra $4 billion during the fiscal year.
The extra money – coupled with some one-time cuts and deferrals – would get the state through the year, they say, without the wholesale slashing that Brown had predicted if the tax extensions were blocked.
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