State Budget: Running the Clock

If you are wondering what is happening to the state budget, it appears that the closest analogy is the point in the film High Noon in which the train carrying the Bad Guy arrives at noon. After he arrives, there will be a confrontation/shoot-out with the Good Guy. In the case of the state budget, however, it is midnight - not noon - that is critical: midnight on June 30. At that point, the fiscal year 2010-11 ends and there is no budget to replace it. Also, the taxes that the governor wants to extend expire so that any ballot measure regarding them becomes an issue of tax increases, not extensions.

The Republican strategy seems to be to run the clock until after June 30. They can then offer to put a tax vote on the ballot, expecting that tax “increases” will be defeated, unlike tax “extensions.” And the price is some kind of pension proposition (that could override the pension changes the Regents adopted for UC last December), some kind of spending cap, and various regulatory changes.

Democrats could pass another majority-vote budget with no tax increases to replace the one the governor vetoed. If they pass another that he again vetoes, that passage could nonetheless restore their pay (and the pay of legislative Republicans), so long as it is “balanced” on paper. Contrary to some public impressions, the controller’s decision not to pay does not hinge on the realism of the “balance” but rather technical issues that the Dems could correct. There is brave talk about a Democratic budget that would somehow have retroactive taxes after July 1. No one has any idea what that means, or even could mean.

Nonetheless, the clock is ticking away:

High Noon - clock montage from Steve Parry on Vimeo.

UPDATE: Rather than wait for the shootout at high noon, there is now a report that the legislative Dems and the governor have a deal. It assumes more revenue will arrive than the May revise and contains a trigger; if the revenue does not materialize, that trigger reportedly will - among other programs - cut higher ed. No word about the retroactive taxes, whatever those were supposed to be. Since the Republicans are not part of the deal, the legislature presumably will not put the GOP's desired pension limits, spending cap, and regulatory relaxations on the ballot. Of course, such propositions could be put on a future ballot via the initiative process, assuming someone has the money to pay for signature-gathering firms. There will undoubtedly be more details by tomorrow. Early info at http://blogs.sacbee.com/capitolalertlatest/2011/06/california-budget-deal-under-discussion-by-gov-jerry-brown-and-democrats.html