Dan Walters

By Dan Walters
Published: Monday, Dec. 19, 2011 – 12:00 am | Page 3A

Even those in the Capitol have great difficulty making sense of California’s chronically imbalanced state budget, so it’s no wonder the outside public finds its big numbers so bewildering.

The availability of raw data on the Internet has, if anything, increased confusion because the numbers come with differing meanings that are not apparent to the casual observer.

Take, for instance, a recent report from the state controller’s office on income and outgo that, among other things, said state general fund spending was running about $2 billion ahead of projections, while revenues were about $1 billion under expectations.

Many concluded that the state is $3 billion further into the hole. But to Department of Finance beancounters, the supposed overspending is just an anomaly of cash flow that will even out before the fiscal year ends next June 30, not a budget problem.

That same controller’s report also showed state revenues running billions of dollars under those of the previous fiscal year, which fueled speculation that state fiscal problems were worsening. But it was comparing oranges to apples.

Some temporary tax increases that had been in effect a year earlier had expired, which meant less money coming into the state’s coffers, not less taxable activity. And the current budget redirects about $6 billion in revenues to local governments to pay for the “realignment” of some functions from the state to counties, which also makes a year-to-year comparison invalid without adjustment.

When one does adjust, it turns out that the economy has picked up a bit, which partially offsets the expiration of those temporary taxes, but that revenue still falls short of fully financing ongoing spending commitments, especially for public education.

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