Tuesday, August 16, 2011

California Shortfall

From Bloomberg News today comes an unsurprising revelation,

California revenue fell short of budget estimates by $541 million or 9.2 percent in July, the first month of the 2012 fiscal year, the state Finance Department reported.

Well, unsurprising to those of us who live here and don't have our heads buried, um, in the sand. On the beach, you know, there's lots of sand there.

What happened? Well partly it's called recession, but mostly it's called delusional budgeting. When trying to balance the budget the legislature was not allowed lacked the two-thirds majority required to raise taxes, so they just blithely raised revenue projections instead. "The economy is going to be recovering," they optimistically pretended, "so sales tax revenue will increase by leaps and bounds and that will balance our budget." It only took one month to see how well that worked out.

2 comments:

bruce said...

"not allowed" ? by whom? the political power apparatchik, the voters, their political survival instinct, what? They can do it, they could do it, but did not see reality for what it was and is.

I agree with the point you made, just quibbling with your choice of words.

Jayhawk said...

"Not allowed" as in lacking a two-thirds majority required to do so. Post corrected. Have a little respect for your elders.

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