Wyatt Buchanan
Updated 10:45 pm, Monday, January 14, 2013

Sacramento –Signaling an end to an era of budget gimmicks that masked California’s deep financial problems, the state’s independent fiscal analyst said Gov. Jerry Brown should be commended for offering a fiscally responsible spending plan for the year starting July 1.

Mac Taylor, the nonpartisan legislative analyst, said that while Brown’s budget is balanced on reasonable assumptions about how much tax revenue will be collected by the state this year, lawmakers must show restraint in spending and reduce the state’s debt to keep California on the right track.

“I think we’re in a very different situation than we have been in the last 10, 12 years,” Taylor said. But being conservative with new spending and unloading debt is key, he said.

“We think the governor’s proposal reflects that kind of fiscal discipline and we think he should be commended for the budget he’s put before the Legislature,” Taylor said.

Issues not addressed

He did note, however, that the budget plan does not deal with all aspects of the state’s financial burden. It doesn’t pay off all of the debt accumulated through gimmicks used to balance past budgets, it leaves a small reserve at the end of several years, and it does not tackle unfunded retirement and health care costs for public employees.

The analyst had projected in November that California would face a $1.9 billion deficit, but Taylor said the administration made more optimistic projections about tax revenue, along with other smaller changes in debt repayment, which he said were “reasonable.”

Still, whether the state gets through the year without a deficit and additional spending cuts depends greatly on forces outside the Capitol, most importantly the decisions about spending from Washington and the potential for a recession.

The state would be less hurt by cuts in direct government aid to the state than by the effects of a recession on tax revenue, Taylor said.

And he questioned the plan to use some of the money raised by Proposition 39, a tax on corporations headquartered outside of California passed by voters in November, as part of a larger calculation of funding for public schools.

To read entire story, click here.