California Attacks Budget Crisis With Make-Believe
Unable to agree whether to raise taxes or cut spending, California Gov. Arnold Schwarzenegger and the state’s lawmakers will instead rely on time travel. Sacramento hopes to “save” somewhere around $10 billion by shifting costs to next year’s budget and resorting to other accounting tricks.
They’ll have to do better to close the $24 billion budget gap.
San Jose Mercury News:
Need an extra $2.3 billion? Easy — just make people pay more of next year’s taxes this year, by increasing paycheck withholdings and estimated tax payments.
How about selling a chunk of a state insurance fund? That’s good for a cool $1 billion on paper, even if experts say it’s highly uncertain the sale would fetch that much, if it can be executed at all.
Expenses still too high? Here’s a really creative one: Push back state employees’ monthly paychecks in June 2010 by a single day — from June 30 to July 1 — and thus onto the next fiscal year’s books. Just like that, $1.2 billion “saved.”
Those are just some of the maneuvers — or, to use a less charitable term, gimmicks — that the governor and lawmakers have suggested to help fill a $24 billion shortfall through June 2010. The proposals add up to about $10 billion, depending on what one defines as a gimmick.