Brown projects Calif. deficit to grow during forum

December 8, 2010 6:35:19 PM PST
A painful reality check is coming out of Sacramento in their first look at really how dire the budget situation is. It's being called "Budget 101" for incoming lawmakers. The forum hosted by governor-elect Jerry Brown is taking a scared straight approach in outlining the problem.

Brown is pledging to do everything he can to get the state's finances back in order when he takes over next month. The first step is to define the scope of the problem. The state simply does not have enough tax revenue to cover its spending commitments.

"What we're looking at today is much worse than it's ever been before," said Brown.

Brown hopes some straight talk to lawmakers, and in a sense all Californians too, about the state's finances puts everyone on the same page.

"It's very hard to try to come to any agreement, if there's no consensus on what the underlying facts are," said Brown.

The incoming governor says the state deficit could grow another $3 billion to $28 billion because of possible changes to the federal estate tax. Temporary tax hikes are also about to expire and federal stimulus money has dried up.

With Californians weary of new taxes and Brown hesitant to borrow more, finance experts warn budget shell games aren't going to work anymore.

"I apologize for being the town grouch about these matters, but it's 'lose the gimmicks,'" said Bill Lockyer, D-State Treasurer.

"No matter how you resolve the budget problem, and you're constitutionally required to do so, it's not going to have good effect for the economy," said legislative analyst Mac Taylor.

Even if the state shut down all the prisons, universities and junior colleges, that wouldn't be enough to close the current deficit.

"You add all those numbers up, we're two-thirds of the way to solving the whole problem. So, Californians... is that what you want to do?" said St. Senator Mark Leno, D-San Francisco.

Amidst all these doomsday scenarios, one lawmaker filed a claim this week to restore legislators' full pay. He's challenging the 18-percent cut they took last year to their six-figure salary and benefits last year. He contends it was illegal pressure applied to force them to finally end the long budget deadlock.

"We don't want to be blackmailed when we're making a decision. We want to make a decision in the best interest of our families, the families of our district, and in the state of California, you can't do that when somebody's got a gun to your head," said Assemblyman Gil Cedillo, D-Los Angeles.

While getting people back to work helps generate tax revenue, one panelist projected it will take eight years for employment to recover in this state to the same level it was before the recession started.


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