Anatomy of a Budget Crisis
Rumor abound around the capitol that revenue is falling short of projections in last year’s budget. The May revise, coming soon, is said to be gloomy, although no one has said so publicly yet. Capitol bean counters have an interesting method for determining what receipts from income taxes will be. If you will recall on your tax form, you send your return to one address if you owe money, to another if you get a refund. By counting the trucks going to each address, the estimators know, within a couple of million dollars, exactly how much the state is going to receive.
That being said, it appears that the state is on the verge of another budget crisis.
I survived two such crises during my fourteen years in the Legislature. The first began in 1991 and ended in 1994, after several years of increased spending, an average of 11 percent per year in the late 1980s. Governor Deukmejian tried to stave off the crisis by returning surpluses to the taxpayers, as he did in 1986, with the billion dollar rebate. The CTA responded with Proposition 98, which required any surpluses to be spent on education, and put all education spending on autopilot. The… Read More