By Steven Harmon
Bay Area News Group
Posted: 01/11/2013 06:36:14 PM PST
Updated: 01/12/2013 06:24:55 AM PST
Document: 2013 California budget plan, full summary
SACRAMENTO — Call it the Amazing Vanishing Deficit.
Capitol observers were shocked Thursday when California Gov. Jerry Brown revealed that his administration had produced only the second balanced budget in the last decade. But it turns out producing the deficit-free budget was a tricky feat for Brown and his finance team.
The nonpartisan Legislative Analyst’s Office had projected a $1.9 billion deficit. So how did the governor’s team erase the red ink?
Brown’s finance officials offered a deeper explanation on Friday:
The governor’s budget delayed paying back $1 billion in loan payments to previously raided funds and came up with a rosier economic forecast than the LAO’s.
In the past, the state had borrowed about $30 billion from special funds, schools and local governments. Last year, Brown had planned to pay back $5.2 billion to those funds. Instead, he’s paying $4.2 billion.
“We assess what the repayment schedule is to special funds based on their needs and determined we didn’t need to repay them this year,” said H.D. Palmer, spokesman for the Department of Finance.
An improved economy with more robust revenues — $300 million more than the legislative analyst projected for this year and next — also made the budget balancing easier, Palmer said.
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