At the risk of being the skunk at the picnic, we feel compelled to add a dash of perspective to the self-congratulatory budget euphoria currently running amok around the state Capitol.
Yes, Gov. Jerry Brown successfully fended off legislators who wanted -- as is their way -- to blow through the greater-than-expected revenues that have poured into state coffers this year. Yes, he also was able to obtain some agreement on his ambitious, and long overdue, revamping of the state's education funding system. And, yes, the budget document will be passed on time.
Those are all good things. Steps in the right direction even.
But to boast that California's budget is now balanced -- as some are doing --
It is a bit like a person using a small inheritance to help make minimum, interest-only payments on both his mortgage and his mountain of credit card debt claiming that his household budget is balanced. While the revenues may cover the current expenditures, it doesn't account for or pay down the massive debt obligations and much of the revenue is finite.
The so-called balanced budget makes little provision for the state's huge debt obligations nor does it account for the possible evaporation of what is supposed to be a temporary revenue stream.
Sure, the budget is balanced, if you don't count the more than $50 billion in unfunded liability for the health plans of retired state employees or the $4.5 billion more that the California State Teachers' Retirement System says it needs each year to maintain solvency or the $10 billion that the state borrowed from the federal government to prop up its insolvent unemployment insurance fund. Those are but a few of the tiny details that belie the notion of balance.
It is refreshing to have an on-time, less-constricting budget, but for legislators to tout it as some masterstroke on their part is nonsense.
The rescuers here are California's voters who last November approved temporary tax increases that have helped provide enough revenue to stabilize the state's fiscal picture. Brown put the gravitas of his office behind the campaign by promising most of the money would go into education and that he would use the revenue stream to help find solutions to California's boom-and-bust tax revenue cycles.
This budget does the first part of that. A big portion of the temporary tax increase repays debts owed to the schools and some of it finances Brown's education overhaul. But now comes the tough part, using this respite to responsibly stabilize the state's finances.