CFCE Blog

Balancing the State Budget

By Loren Kaye
Posted 8/15/2007

The Governor has committed to vetoing $700 million to "eliminate the operating deficit" in the 2007 budget. But he really has no choice, and this should not even be a concession to any particular party.  A constitutional amendment he sponsored in 2004 requires this action anyway.

Of course, most everyone has long stopped caring about Proposition 58, touted with great fanfare by the Governor and Legislature as a solution to chronic budget deficits - and passed by voters by a more than two-to-one margin.

But see Section 12 of Article IV of the Constitution, added by Prop 58:

(f) For the 2004-05 fiscal year, or any subsequent fiscal year, the Legislature may not send to the Governor for consideration, nor may the Governor sign into law, a budget bill that would appropriate from the General Fund, for that fiscal year, a total amount that, when combined with all appropriations from the General Fund for that fiscal year made as of the date of the budget bill's passage, and the amount of any General Fund moneys transferred to the Budget Stabilization Account for that fiscal year pursuant to Section 20 of Article XVI, exceeds General Fund revenues for that fiscal year estimated as of the date of the budget bill's passage. That estimate of General Fund revenues shall be set forth in the budget bill passed by the Legislature.

So presumably the Governor couldn't lawfully sign a buget bill with a $700 million operating deficit, anyway.

Of course, that is a ridiculous statement, but it's worth remembering when politicians claim solemn adherence to balanced budget principles. The voters were told in 2004 that's what they were voting for, yet are being told again today that taking action to balance the budget is special and optional.

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