The Governor is the Lone Ranger on the Trigger

The Sacramento Bee today carries a story about the budget for next year, the trigger based on this year’s revenues, etc. It refers to various projections made by the governor and others which unfortunately continue the standard state (and local) practice of mixing up stocks and flows and using words such as “deficit” outside the common meaning. First, it talks about a projected “deficit” for next year of around $3 billion. Anyone is free to project. But what was adopted last June was a budget for 2011-12. Anything beyond that is at most a “workload” projection.

And, if you mean by deficit that inflows < outflows, the budget enacted was in fact a surplus budget since it forecasts outflows > inflows. Of course, the legislature added a $4 billion extra revenue assumption. If none of that appears, the budget would be in deficit (outflow < inflows). The trigger is geared entirely to revenues, not to surplus or deficit by any definition. One thing of which the Bee story is a good reminder is that whether the trigger is pulled ultimately is in the hands of the legislature and governor. Yes, they put in place a trigger formula. But what was enacted in June could be un-enacted or modified at a later date.

As prior posts have noted, UC would be part of any trigger cuts.

The Bee story is at http://www.sacbee.com/2011/11/07/4034891/the-buzz-california-assembly-aides.html

Indeed, the memo underlying the story may have been leaked to test the climate for just such a modification. And probably, the key person in the decision is the governor – who could veto any change in the trigger. In effect, the governor is something of a Lone Ranger – and deciding how much silver the state needs to have coming in - when it comes to the pulling the trigger (or not):