Governor-elect Brown looks for explanation, solution for state’s budget woes

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California Governor-elect Jerry Brown speaks to supporters as he celebrates his win during an election night party at Fox Theater on November 2, 2010 in Oakland, California.

Governor-elect Jerry Brown told a budget forum in Sacramento on Wednesday that the state government’s projected deficit next year would reach $28 billion.

Brown asked the state’s top fiscal advisors to explain how California got into this mess – and to find ways to get it out. Brown said he wanted to define California’s budget problem before trying to reach agreement with the legislature on how to solve it.

“It’s very hard to come to any agreement if there is no consensus on what the underlying facts are,” said Brown.

Finance Director Ana Matosantos tallied $60 billion worth of “solutions” lawmakers enacted in the last decade that didn’t last.

“Temporary solutions that provide substantial assistance in balancing the budget but they’re temporary in nature,” she said. “Solutions that can’t be repeated. So they were of one time assistance so they can’t occur again. And then some solutions that made the future deficit worse.”

Controller John Chiang said the state government’s recent budgets also failed to stash enough cash.

“The budget decisions have a direct impact on the cash available for the state to pay the bills,” he said.

Two years ago, a cash shortage forced Chiang to issue IOUs. Chiang said the state now borrows twice as much cash from outside lenders and internal funds as it did four years ago.

State Treasurer Bill Lockyer said California also takes on more bond debt. Lockyer said lenders would keep charging California higher interest rates for that money unless the state changes its modus operandi.

“Lose the gimmicks. Honest budget solutions, accurate revenue projections no more deficit borrowing,” said Lockyer.

Brown said he’s optimistic that California lawmakers can find a better way to balance the budget.

“The crisis is going to open a way to a solution because really our backs are to the wall,” he said, noting California’s government can’t keep doing the same thing.
“The problem’s getting worse.”

The new governor’s term begins on Jan. 3; he’ll submit his budget proposal to state legislators a week later.

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