Experts Expound: The impact of the budget shortfall

It is shaping up to be a very tough budget year in Sacramento, with the Legislative Analyst’s Office predicting the Golden State could be facing a $68 billion budget shortfall. With that in mind, we posed the following question to our panel of experts and let them expound:

How will the LAO’s projection of a $68 billion budget shortfall impact the upcoming legislative session?

“The projected budget deficit won’t constrain the Legislature, it always believes there’s extra money under a mattress somewhere to fund its spending bill. But Newsom’s been pretty brutal about kayoing Democratic-sponsored legislation that would cost money he thinks the state doesn’t have, so I guess he’ll be wearing out his veto pen next year.”

“For the first time in decades, a Governor and progressive Legislature used to spending wildly will have to slash budgets instead. Ain’t gonna be pretty.”

“It is really easy to govern in times of surplus.  It is much harder to do when you have to make tough choices. This Legislature and Governor aren’t used to that. It changes everything about the posture of every power player in the game.”

“It won’t have as much of an impact as it SHOULD have.”

“Untested group of legislators, 90% of whom have never seen a budget deficit. Should get less legislation, more taxes, and large assumptions about federal backfill.”

“Legislators usually act more responsibly when there is a major budget deficit, as opposed to a large surplus. Very few, if any, new major spending programs are enacted with this type of a deficit, and they get less pissy when the bills they do author are held in the Appropriations Committee. They also have an easy out for not carrying bills shopped by lobbyists and others that they don’t want to author. And, if you are trying to kill bills, this makes that task much easier. Did I say too much???”

“I have lobbied the budget since the 80’s.  It will be interesting to see what happens with May revise and new fiscal Chairs.”

“LAO is always such a downer … especially after the Governor presents a rosier picture.  I did get a bad feeling when spokespeople for Governor and Finance both reminded us that we had so much in reserves as if all that $ was there for us to spend!  (I can hear Jerry Brown now saying … it’s called reserves for a reason!) In an election year, no one wants to start off kicking the can down the road, but I think there will be a lot of that this time and some of the “one time” expenditures will actually have to end.  Going to make for a fascinating January budget for the Governor.”

“The budget shortfall projected by the LAO will split the democratic majority. Calif will act more like a special interest state. The needs of the old will be pitted against the young, rural will be pitted against urban.”

“Bedlam and chaos as groups recently aligned have to fiercely advocate for their own spending priorities – at the expense of others.”

“Dreadful news for a Legislature heading into an election year. Voters, especially young voters, already are skeptical and cynical about government, and the prospect of watching this bunch of electeds wring hands and squabble over a severely diminished pile of goodies will only exacerbate the public’s already dim view of both parties and could put a serious dent in the governor’s image.”

“Hopefully by closing the tax loopholes enjoyed by the richest corporations and biggest billionaires.”

“The legislature did not make the necessary changes they needed to when ‘times were good’ to protect critical programs in the face of this (anticipated) economic downturn. Worse, they went on a spending spree with pet programs and one-time spending. For programs that were passed last year, but for which funding hasn’t been allocated, I would urge advocates to keep a close eye on those funds as they may be absorbed back into the coffers. In the past, programs like First Five and the Foster Youth Insurance Fund have been raided for ‘loans’ to backfill losses, and I expect to see more of the same attempted in the upcoming year.”

“The budget shortfall will have the Legislature and Administration looking to control costs and raise revenue. This group of lawmakers has never had to cut programs and they’ll find it challenging and painful — watch for new taxes/fees on business, creative corner cutting to reduce costs and pet programs put out to pasture.”

“After squandering a $100-billion surplus, California already finds itself facing a massive deficit. Instead of learning to be more responsible and effective with the money they have, it’s clear our leaders think that Californians should have to pay higher taxes to make up for politicians’ mistakes. The Governor and Legislature have already responded by suing to prevent voters from having a say in how we get taxed (Taxpayer Protection Act). Restricting voter influence on taxes is a clear threat to democratic principles and accountability, but for politicians, it’s a way to ensure they can keep raising taxes to continue spending, even with a $58 billion deficit.”

“I predict state employees will have-to turn in cell phones again and state travel will be curtailed dramatically, just like we did it in 2011 with Jerry, which will put pressure on the Legislature to find cost savings too.”

NOTE: An earlier version of this story indicated a $58 billion shortfall. It has since been updated to reflect the newly-released LAO report estimating a $68 billion shortfall.

The people from whom we solicited opinions: Elizabeth Ashford, Hector Barajas, A.G. Block, Barry Brokaw, Samantha Corbin, Jon Costantino, Richard Costigan, Tim Foster, Rex Frazier, John Howard, Fiona Hutton, Gale Kaufman, Steven Maviglio, Mike MeCey, Paul Mitchell, Barbara O’Connor, Jack Ohman, Kassy Perry, Matt Rexroad, Garry South, Paula Treat, Bill Wong, Daniel Zingale