Dan Walters: Legislative analyst gives Democrats more money

05/19/2013 12:00 AM

05/19/2013 8:49 AM

Jerry Brown – who made "lower your expectations" a catchphrase of his first governorship – is back in that mode during his second stint, especially on spending.

When Brown unveiled a revised 2013-14 budget last week, it was evident that he and his budget "gnomes," as he called them, had adopted a relatively pessimistic view of revenues, despite a recent surge in income taxes.

It was, Brown said, largely a one-time bump, rather than a harbinger of a dependably higher revenue flow, and because of that, he was unwilling to restore cuts in health and welfare programs for the poor, the aged and the infirm.

"The money's not there," he told reporters, uttering a flat "no" to a question about restoring those "safety net" services.

The response did not please Democratic legislative leaders and they hoped aloud that a revenue estimate from their Legislative Analyst's Office would provide more room for spending on those services.

On Friday, the LAO made that hope a reality, at least on paper, saying that the state could expect $3 billion-plus more than the governor projects.

However, the relatively rosy forecast came with caveats – that the money might not show up and if it does, most of it would have to go to schools unless the Legislature and Brown change the current interpretation of state school finance law.

Moreover, Legislative Analyst Mac Taylor endorsed Brown's go-slow approach to spending, urging the Legislature to "adopt a cautious budgetary posture" for precisely the reasons Brown cites – the danger that spending more now could morph into deficits later.

That has happened in years past, most notably in 2000, when legislators and then-Gov. Gray Davis squandered most of a one-time tax windfall on permanent spending and tax cuts, leading to deficits that fueled a successful recall of Davis.

Brown could have easily written Taylor's advice: "After years of 'boom and bust' budgeting, California's leaders now have the opportunity to build a budget for future years that gives the state more choices about how to build reserves in times of healthy revenue growth, prioritize future state spending, and pay off past debts. There is a risk that our outlook will prove wrong in the near term because capital gains are volatile and stock trends are impossible to predict."

And if schools were to claim most of the money, whatever it may be, it would lubricate Brown's high-profile drive to give more money to districts with large numbers of poor and/or English-learner students.

Legislative leaders may like Taylor's revenue number enough to adopt it.

But will they also accept his advice that echoes Brown's go-slow approach to spending? And will they let most of the new money go to schools, or devise a way to divert more to health and welfare services?

Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/walters. Follow him on Twitter @WaltersBee.

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