Capitol budget cuts: trigger, unhappy

There is at least a $601 million budgetary boulder of coal that will appear in the stockings of several branches of state government, including the University of California and the California State University system.

That is the low end of the badness. Depending on how wrong the state’s revenue estimates are, another $1.9 billion in cuts—approved back in June—would fall on public schools, eliminating up to seven days of instructional time and ending the state’s $248 million contribution to paying for buses that haul kids to and from campus.

This gift, if it can be called that, comes courtesy of a still-stagnant state economy and way-rosy revenue projections in the budget deal signed June 30. The legislative analyst has already said those estimates are $3.7 billion too optimistic, and that most of the $2.5 billion in total cuts need to be imposed. Gov. Jerry Brown and his number crunchers have until next week, December 15, to decide if they agree.

Brown’s department of finance has all but said there will be cuts, but not how much.

“Some level of trigger cuts will likely occur but the exact amount will be known in December,” said Ana Matosantos, Brown’s finance director, in a statement November 11, when the analyst’s forecast was released.

California’s budget woes seem like a broken record. How many years has it been the same sad tune? Economy sucks. State tax revenue falls short of spending obligations. Republican lawmakers won’t provide the handful of votes needed to increase taxes. Deeper and deeper cuts are imposed.

For the fiscal year that begins July 1, 2012, the analyst says there’s a $13 billion budget hole. That generated rejoicing because $13 billion is low compared to previous years.

It was the GOP’s “just say no to even letting voters decide if they want to up their own taxes” that led the septuagenarian governor and legislative Democrats—who can pass a spending plan on a majority vote but need Republicans to get the two-thirds required for tax hikes—to cross their fingers and say the Golden State would collect $4 billion more than expected, effectively balancing the budget through wishful thinking.

Even the most amateur economist can easily attest that the extra $4 billion isn’t going to show up.

So, as Brown’s department of finance says, the question is no longer “if,” but how much.

The triggered cuts are structured in two tiers. If revenues are more than $1 billion short of June’s estimates, the first round of $601 million in reductions occurs. Count on those happening.

Public schools—which have already been shorted at least $17 billion over the past several fiscal years, according to a June 2010 survey of nearly 390 districts by the California Department of Education—take their hit if Brown says revenues are $2 billion or more below last June’s estimates.

One-third of the first round of new cuts fall on the UC and CSU systems, each shouldering $100 million in reductions. Also slated for $100 million reductions are services to the developmentally disabled and in-home care.

These come on top of sizable whacks in the budget, which took $1.4 billion from UC and CSU, $567 million from the Department of Developmental Services and $413 million from state subsidies for in-home care.

Neither the UC nor CSU system has been skittish about helping students bear some of their budgetary burden through higher tuition.

If Brown doesn’t want to add public schools to the cut list, his December 15 revenue forecast must be $1.7 billion higher than the analyst.

If he elects to include schools but doesn’t want to eliminate a full seven days of instruction, each day preserved costs $215 million.

Including schools or excluding them, any additional spending reductions will be felt.

“The cupboard of easy solutions is bare,” said State Senate President Pro Tem Darrell Steinberg, a Sacramento Democrat.

“Just ask the students in our higher-education systems. Or the more than 1 million elderly, blind, or disabled living in poverty and the families who see their kids go to school where the classrooms are more crowded and the resources are dwindling.”