Gov. Jerry Brown announced $8.3 billion in cuts, along with new taxes, in Sacramento on Monday.
Oh no, we've seen this movie before.
Gov. Jerry Brown anticipates the state will collect upwards of $1 billion during the coming fiscal year from the state's greenhouse gas cap and trade energy revenues. The program is scheduled to unfold in the next few months.
At a time when the state faces a staggering $16 billion deficit, this revenue could be the sweetest financial news in years.
Or is it?
The cap and trade program sets targets for the state's major energy users and pollution emitters.
Those companies that exceed their targets can buy permits for more energy use, a concept that is designed to discourage consumption while providing more revenues for the state from those that exceed their energy allowances.
The problem is that the legality of the program is anything but certain. Governor Brown may be counting on up to $1 billion next year, but several lawsuits question cap and trade on everything from violations of the Constitution's interstate commerce clause to conflicts with existing state laws.
Given the current state of confusion, it's more than a little risky to assume anything about if or when the program would take effect.
The assumptions regarding cap and trade revenues are the latest example of overly optimistic projections by California governors.
Recently, Brown saw a "balanced" budget go down the drain as the result, in part, from several law suits that tossed out reduced commitments to various social welfare programs.
Former governors Arnold Schwarzenegger and Gray Davis suffered similar plights, each making assumptions that failed to last the year.
But erroneous fiscal forecasts do more than throw the state budget out of whack; they serve as fodder for public distrust and cynicism. How, the public wonders, can you--the governor and legislature--say the budget is balanced one day only to discover an unbalanced budget a few months later?
No wonder the public doesn't know what to think.
Governor Brown and the legislature would be a lot better off if they passed a budget with real dollars rather than uncertain, or potential, or coulda-shoulda-woulda dollars. Laboring under those conditions may feel good for the moment, but produce considerable pain for all in the end.
Let's hope that cap and trade "revenue" isn't the latest example of Sacramento's fiscal folly. We simply can't afford dollars that never appear because of wishful thinking.