Progress(?) on the California Budget

Here is a quick look at some recent developments in the never-ending California state budget crisis is in order.

That characterization - never-ending - appears to be more true than ever before as this report in today's LA Times notes that recently proposed budget moves will virtually guarantee that the Golden State's fiscal challenges will extend far into the future.

By far, my favorite part of the proposal is to push state employees' June 2010 paychecks into the month of July - issuing them at exactly 12:01 AM on July 1 - so as to have them included in the following fiscal year. This move is expected to save $1.2 billion in the 2010 budget due to there being only 11 months of paychecks issued.

In theory, this same move could be applied to the entire state budget, thus producing a savings of 11 percent across the board for the 2010 budget. Since the state is unlikely to ever catch up, they'll always be paying bills one month later than usual and, after everyone gets used to that idea, the next logical step would be to institute a two month delay when money gets tight again.

You can see how budget "savings" such as these could be extended to cover many future budget gaps years into the future - a good long-term plan...

Comments

[Harry Tuttle:]

It may work. As we have seen, the pundits are not too smart and they may interpret the numbers as a signal that somehow the problem was solved. Like "beat the earnings ex-special items." I mean, Bear Stearns was going to post "good earnings" just before it imploded.

Jun 25 08:22 AM

[Roger C. Wren:]

About 35 or 40 years ago when I was in the Navy the federal government did that with military pay during a financial crisis. The military before then got paid on the 15th and 30th of every month. At the time the fiscal year ended on 30 June. That year the 30 June paycheck was issued on 1 July, meaning in the ending fiscal year only 23 bi-monthly paychecks were issued for the military. Ever since the military pays on the first and the 15th.

But the budget deficit in the target year did not look as bad as it really was.

Jun 25 10:49 AM

[awake09:]

Do you know how debilitating it is to live in the clown capitol of the country? Democrat legislators know that they need do nothing, as their voters are only concerned about free this and free that, sexual liberation morality and continued government intervention. The entire damn state is in a pot-smoke haze. I have gotten to the point to where I almost welcome a fiscal disaster, as these hippies will not stop until they can no longer pay their own taxes.

Jun 25 02:06 PM

[Northstar10000:]

I used to live in california. I saw it as a fools paradise and got out.
Never saw a greater bunch of fools assembled in one spot on the globe. They thin the money simply appears from magic. Uneducated free lunch idiots by the millions. an Obama paradise.

Jun 25 07:58 PM