Updated 10:38 pm, Friday, January 11, 2013
If you’ve ever wondered how to make a billion dollars vanish, see Gov. Jerry Brown’s budget proposal.
For the first time in a long time, California is looking at a budget that doesn’t require deep spending cuts and that doesn’t have a deficit.
We found a convenient budget trick that helped make this possible.
Over the past decade, lawmakers have balanced the state budget in part by borrowing money from special funds, revenue that’s raised by specific fees and taxes. Lawmakers have borrowed from those funds in the very lean times, and promised to pay them back.
Brown did this as well, and although he had planned last year to pay back special funds by $5.2 billion in the 2013-14 year, he now proposes to pay $4.2 billion. Turns out, says H.D. Palmer, spokesman for the California Department of Finance, that those special funds “had higher balances” or fewer needs than had been projected.
Interestingly, in November, the Legislative Analyst’s Office projected that California would have a deficit in 2013-14 of $1.9 billion, absent the lower debt payments to special funds.
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