California meltdown

An occasional flyover of the state budget crisis

Legislators and others are wondering what Gov. Schwarzenegger’s budget revision, due this Friday (May 14), will look like. Most expect it will be much like his January worst-case budget, since little has changed since then to eliminate the $20 billion budget deficit. Look for wholesale devastation of safety-net programs. In the meantime, here’s what’s happened in recent weeks.

Sun., April 11: The Sacramento Bee publishes an in-depth analysis of how too-generous pensions given government employees in recent years have resulted in a $28 billion gap between the amount of pension money that’s invested and the amount that’s promised to employees and retirees in California’s 80 largest city and county governments.

Thurs., April 15: The San Francisco Chronicle reports that, according to a UC Berkeley economist’s research, Gov. Schwarzenegger’s decision to include workers at agencies that generate revenue in his furlough plan decreased the total amount of savings by $700 million.

Thurs., April 23: The California Supreme Court rejects the governor’s request that it consolidate the approximately two-dozen lawsuits challenging his furlough program. According to the Sacramento Bee, the state has spent $736,283 on private attorneys defending the program.

Tues., April 27: In an analysis of Gov. Schwarzenegger’s plan to sell off 11 state office properties, the Legislative Analyst’s Office stated the plan represented a “bad budgeting practice.” Although the state would get a one-time windfall from the sale, it would be forced to pay much more in lease costs over time, the LAO said.

Tues., April 27: Organizers of a massive free mobile health clinic in Los Angeles were so overwhelmed by people needing dental care they were forced to ask them to return next week. According to the Los Angeles Times, much of the increased demand was tied to the state’s elimination of adult Denti-Cal last July.

Fri., April 30: After four months of positive revenue news, the state took a tumble in April, State Controller John Chiang reports in a release. The month’s receipts dropped by $3.6 billion, or 26.4 receipts, after tracking $2.3 billion ahead of projections through March. “The governor and Legislature need to move quickly and forge the consensus needed for a balanced budget,” Chiang states. Don’t hold your breath.

Mon., May 3: In the wake of the disastrous Louisiana oil leak, Gov. Schwarzenegger pulls the plug on the controversial Tranquillon Ridge drilling project off the coast of Santa Barbara County. He was hoping to raise $119 million in fees in 2010-11 and $1.8 billion over 14 years by allowing the drilling.

Tues., May 4: A Sacramento Superior Court judge rules that the state can take $2.05 billion from local redevelopment agencies to spend on education. The city of Chico has since handed over $9.2 million. Meanwhile, the California Redevelopment Agency is appealing the ruling.

Tues., May 4: The heads of the state Senate and Assembly, Darrell Steinberg and John Pérez, are in Washington, D.C., hats in hand and meeting with House Speaker Nancy Pelosi and Health and Human Services Secretary Kathleen Sebelius in the hope that more federal money might be sent California’s way.