Governor says budget is balanced, but tenuous
By Michael Gardner6:43 p.m.Jan. 15, 2013

SACRAMENTO — Gov. Jerry Brown’s proposed path toward fiscal solvency could be quickly driven off course by forces both within and outside his control.

Brown acknowledged as much when he unveiled his 2013-2014 spending plan last week.

“We’re talking about a balanced budget. We’re talking about living within our means. This is new. This is a breakthrough,” Brown said. “As we say that, that doesn’t mean we’re in the clear.”

There are a number of potential threats shadowing Brown’s bid to bring state revenues in line with spending. Congress and the courts will play a role. His fellow Democrats may press for more spending. And how well global and national economies hold up will affect the revenue stream.

Brown’s budget now goes to the Legislature, which this spring will start the task of setting its own priorities. But the big-ticket spending and related policy decisions will be put off until after the governor submits an update in May that will be grounded in more accurate revenue projections.

“That’s when the tough choices will be made,” said nonpartisan Legislative Analyst Mac Taylor.

Brown insists he will not hesitate to rein in new spending.

“I want to advance the progressive agenda,” Brown said, “but consistent with the amount of money people made available (by approving higher taxes in November) … I respect and embrace my role of saying ‘no.’”

Assemblyman Jeff Gorell R-Thousand Oaks, who specializes in budget issues, hopes Brown sticks to his word given the $97.7 billion general fund has just a $1 billion reserve.

“His budget spends just about every dollar that comes in,” Gorell said. “That’s always a dangerous place to be.”

The outcome will have repercussions for millions of Californians, from college students hoping tuition bills stay the same to businesses facing potential hikes in unemployment insurance premiums to the disabled needing in-home aides to stay independent.

Here is a look at a few of the budget wild cards that could reverse California’s gains:

CONGRESS

How the new Congress and president deal with the debt ceiling and potential spending cuts could have repercussions, particularly in a state so vested in the defense industry and with big bills for social services partially covered by federal dollars.

“If they ever do get religion and start balancing that budget we could be in deep trouble short-term,” Brown said.

The legislative analyst warns that the debt ceiling debate and uncertainty threaten to put the housing market back into a funk.

Moreover, the analyst specifically cited San Diego in warning of a fallout.

“Segments and regions of the economy with high concentrations of federally funded activity, such as the San Diego region with significantly military and federally funded research activities, could be negatively affected,” the analyst reported.

COURTS

Brown is no different from his predecessors in being told by the courts how to spend tax dollars. Case-in-point: a federal court order to spend millions more on prisons.

Brown has filed court papers contending the state has complied with costly court orders to ease overcrowding and improve medical care for prisoners.

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