Stateline Story

Skepticism Abounds Over California Budget Deal

  • October 07, 2010
  • By John Gramlich
A record-long standoff over the California budget appears to be nearing its end, with votes on a spending plan expected in Sacramento today (Oct. 7). But the details of the agreement — including the way it was reached — are generating sharp criticism.

The Los Angeles Times says the deal — which tries to erase a staggering $19.1 billion deficit after more than three months of legislative gridlock — " would fall out of balance almost the moment the ink dried." That's because it relies on "rosy revenue assumptions" and "accounting sleight-of-hand." For instance, California is expecting the federal government to send it $5.3 billion in assistance, even though only $1.3 billion of that money has actually been approved by Congress. Another $1.4 billion in the budget is based on economic assumptions the paper deemed "optimistic."

"By legislators' own calculations, the package would shave less than $9 billion from the deficit by cutting programs and suspending corporate tax breaks," the Times reported. "That leaves more than $10 billion in other solutions," none of which include tax hikes.

Meanwhile, there has been plenty of complaining over the way the agreement was reached: out of the public's view. Legislative leaders met privately for five hours last week and ultimately announced a budget framework without providing any details. A public hearing on the budget lasted last than an hour yesterday (Oct. 6) and included no public testimony. The process, the Times noted, stands in direct contrast to Assembly Speaker John Perez's vow for transparency earlier this year. The budget, Perez said then, "will not be written behind closed doors."