California To Have A Budget Surplus

[108]

California's budget really didn't have many problems until the crash of 08 that left nearly every state reeling with a lack of revenue


Link (http://news.yahoo.com/governor-brown-unveil-california-budget-141509838.html)

SACRAMENTO, California (Reuters) - California's budget deficit is gone after years of financial troubles, Governor Jerry Brown said on Thursday, proposing a state budget plan that would raise spending on education and healthcare, boosting total expenditures by 5 percent with a surplus remaining.

But Brown vowed to push back at legislators eager to increase spending even more by restoring the billions of dollars to social services and other state programs cut in lean years.

"I am determined to avoid the fiscal mess that the last few governors had to deal with," Brown told reporters as he introduced his budget plan for the 2013-14 fiscal year beginning in July. Leading Democratic legislators agree with his plan.

California's economy melted down with the housing market, slashing the state's revenue, but it is finally on the mend. For years the state's leaders have tackled budget deficits with a combination of deep cuts and accounting gimmicks. The projected surplus is now the latest surprise.

[myamiG8R]

fine... i still think we should let them be their own country... trade them for puerto rico, so we don't need to change the flag... or make canada a state...

[surfn1080]

So he finally put his foot down to increase spending. Lets see of that's what actually happens as with government, they always spend more then planned.

[Dreamliner]

I like the idea of adding Canada. It would make the US more conservative, for starters.

[ATLitigator]

you missed the last line and a half.......see..."...accounting gimmicks. The projected surplus is now the latest surprise."

they slashed their deficit and PROJECT a surplus with ACCOUNTING GIMMICKS

what did they do about all those inflated pensions...?

[108]

you missed the last line and a half.......see..."...accounting gimmicks. The projected surplus is now the latest surprise."

they slashed their deficit and PROJECT a surplus with ACCOUNTING GIMMICKS

what did they do about all those inflated pensions...?

i read that as them talking about the past

For years the state's leaders have tackled budget deficits with a combination of deep cuts and accounting gimmicks.

[northandsouth]

California's budget really didn't have many problems until the crash of 08 that left nearly every state reeling with a lack of revenue


California's economy melted down with the housing market, slashing the state's revenue, but it is finally on the mend. For years the state's leaders have tackled budget deficits with a combination of deep cuts and accounting gimmicks. The projected surplus is now the latest surprise.[/I]

Sounds like the "latest surprise" might be more from "accounting gimmicks" than actual economic growth.

And "creative accounting" is a sure-fire path to long term economic stability.

[G8trGr8t]

creative accounting and massively underfunded pensions lie beneath the surface of the gimmicks

[rivergator]

there you guys go. If a liberal state balances the budget, it must be cheating.

[northandsouth]

there you guys go. If a liberal state balances the budget, it must be cheating.

Well, are you asserting that their current budget situation is the result of revenue growth piggybacked off an expanding economy?

If, as the opening contribution stated, the budget surplus is from massive cuts and, and I quote, "accounting gimmicks" what the hell are reasonable people supposed to conclude?

I did not use the word "cheating." You interjected that presumption. Falsely too.

Care to re-enter the actual discussion and try again?

[rivergator]

Well, are you asserting that their current budget situation is the result of revenue growth piggybacked off an expanding economy?

If, as the opening contribution stated, the budget surplus is from massive cuts and, and I quote, "accounting gimmicks" what the hell are reasonable people supposed to conclude?

I did not use the word "cheating." You interjected that presumption. Falsely too.

Care to re-enter the actual discussion and try again?

No, those are what they did for years in order to achieve a balanced budget. Now they don't have to resort to that. That's what the story said.

[oragator1]

Maybe I am missing something, but this isn't the year end tally, this is his projected budget? Can we see the budget actually prove correct before claiming they are balanced? Not saying it won't be, but politicians and math aren't always the best of friends.

[rivergator]

Maybe I am missing something, but this isn't the year end tally, this is his projected budget? Can we see the budget actually prove correct before claiming they are balanced? Not saying it won't be, but politicians and math aren't always the best of friends.

yes, this is a projection.

[northandsouth]

No, those are what they did for years in order to achieve a balanced budget. Now they don't have to resort to that. That's what the story said.

Do you even understand what accounting is? And how it works?

So they used tricks and gimmicks to bury liabilities from the past instead of actually paying for the expenses and now that has resulted in a doctored financial statement that allows current revenues to be expended on current projects and programs instead of fulfilling legitimate obligations.

I have some experience here, having worked as a consultant to the government of Brazil since 1998. Brazil tried this same trick.

Again, I ask you. Are you asserting that the current budget situation in California is the result of an expanding tax base the result of an expanding economy? Simple question. You may find the answer not to be so.

[bluelang]

California's going crazy with construction/manufacturing boom right now.

https://www.google.com/search?q=california+construction+boom&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=fflb

If government can be 50% disciplined they should have sufficient revenues to run a surplus over the next few years.

[GatorNorth]

fine... i still think we should let them be their own country... trade them for puerto rico, so we don't need to change the flag... or make canada a state...

california has its problems but trading away the world's 7th or 8th largest economy for mostly frozen, uninhabitable tundra or an island of unskilled laborers is nuts.....and isn't puerto rico already a US territory? Not much to gain there.

[rivergator]

Do you even understand what accounting is? And how it works?

So they used tricks and gimmicks to bury liabilities from the past instead of actually paying for the expenses and now that has resulted in a doctored financial statement that allows current revenues to be expended on current projects and programs instead of fulfilling legitimate obligations.

I have some experience here, having worked as a consultant to the government of Brazil since 1998. Brazil tried this same trick.

Again, I ask you. Are you asserting that the current budget situation in California is the result of an expanding tax base the result of an expanding economy? Simple question. You may find the answer not to be so.

do I know what accounting is? Why, yes, I think so.
As far as your claim
allows current revenues to be expended on current projects and programs instead of fulfilling legitimate obligations.
how do you know that's true?

[JerseyGator01]

In other news, it is projected by some that I might be the sexiest man alive by the end of the century.

[orangeblueorangeblue]

They cut their deficit.

It's by no means an actual surplus, though.

[northandsouth]

do I know what accounting is? Why, yes, I think so.
As far as your claim

how do you know that's true?

Your statements prior allow the inference you have no understanding of the long-term balance sheet implications accounting gimmicks reflect on the availability of current revenues to be spent on new projects.

My question was do you "understand" accounting, not that you "know what" it is as you assert last. Those are not the same thing.

As to your question of "how do (I) know that's true?"

Accounting gimmicks and tricks allow you to create a false and misleading balance sheet that allows you to divert current funds from legitimate prior obligations to more current projects. It is really that simple. My history of working with governments has given me much experience seeing exactly this.

You accused me of criticizing the use of "accounting gimmicks" on behalf of a "liberal state" based on nothing more than politics. Methinks you attempt to attack the messenger as a way of diverting attention from the message. Especially since you know nothing of me.

I will ask again, in the sincere hope you will at least offer your opinion if not a factually supported statement. Is it your assertion the current budget situation in California is the result of an expanding tax base the result of an expanding state economy there? Or is the the result of trickery and gimmicks?

Again, simple question. I cannot fathom why you refuse to answer. Unless you know the answer and that said answer will expose your earlier attempt as mere hackery.

[Dreamliner]

Governor Moonbeam a conservative ? Who knew ?

[SydneySLee]

So cutting spending and raising taxes doesn't make things worse? Anyone tell Europe about this idea? Or maybe the OP didn't see the irony of posting this about a State and not about the US.

[rivergator]

Your statements prior allow the inference you have no understanding of the long-term balance sheet implications accounting gimmicks reflect on the availability of current revenues to be spent on new projects.

My question was do you "understand" accounting, not that you "know what" it is as you assert last. Those are not the same thing.

As to your question of "how do (I) know that's true?"

Accounting gimmicks and tricks allow you to create a false and misleading balance sheet that allows you to divert current funds from legitimate prior obligations to more current projects. It is really that simple. My history of working with governments has given me much experience seeing exactly this.

You accused me of criticizing the use of "accounting gimmicks" on behalf of a "liberal state" based on nothing more than politics. Methinks you attempt to attack the messenger as a way of diverting attention from the message. Especially since you know nothing of me.

I will ask again, in the sincere hope you will at least offer your opinion if not a factually supported statement. Is it your assertion the current budget situation in California is the result of an expanding tax base the result of an expanding state economy there? Or is the the result of trickery and gimmicks?

Again, simple question. I cannot fathom why you refuse to answer. Unless you know the answer and that said answer will expose your earlier attempt as mere hackery.


I'm sorry, but is your question whether I know exactly everything that is going on in the California budget? Do I know all specifics about the accounting?
The answer, of course, is no. And neither do you.

[northandsouth]

I'm sorry, but is your question whether I know exactly everything that is going on in the California budget? Do I know all specifics about the accounting?
The answer, of course, is no. And neither do you.

Then why in the hell do you make a knee-jerk contribution automatically presuming that a statement discussing the possibility/probability that "accounting gimmicks" might not be indicative of an accurate and reliable budget situation has to be the result of some reflective response in opposition to a liberal state?

I love how you turn and twist a direct question in some effort to evade a simple answer. I never asked if you know "exactly everything" regarding the current budgetary circumstances in California. Merely, I asked if you believe the reported surplus is the result of an expanding tax base resulting from an expanding state economy? One not need know with absolute certainty EVERYTHING about the budget to answer the question I posed to you to formulate an answer. But it appears you have staked a position that my comments HAD to be the result of some political assault so I can see where you prefer to continue to evade a direct response.

You seem to be able to read my mind and capable of inferring my motives quite easily. Surely you have some ability to discern the nature of the California economy as it relates to the question at hand. Right?

Or do you merely spout garbage in an effort to squelch posters who contribute questions in opposition to your particular mindset? You see, I merely stated, based on my personal experiences with budgeting on a governmental level, that a surplus resulting from "accounting gimmicks" is not reflective of a strong and stable and growing economy. You immediately attacked this opinion as some thoughtless negative assertion based on nothing more than politics. Why did you of all people here, the self-proclaimed purveyor of rational and reasonable thought jump to such a conclusion?

[rivergator]

Then why in the hell do you make a knee-jerk contribution automatically presuming that a statement discussing the possibility/probability that "accounting gimmicks" might not be indicative of an accurate and reliable budget situation has to be the result of some reflective response in opposition to a liberal state?



I think because I read the story and actually understood it.

[G8trGr8t]

do you believe that all their pensions are fully funded?

[rivergator]

do you believe that all their pensions are fully funded?


don't know. do you?

[northandsouth]

I think because I read the story and actually understood it.

Actually, you obviously did not. Perhaps what the words said, but not the accurate picture of the situation the words portray.

I guess you refuse to answer a direct question. So why bother?

The article states California is about to spend more money because their accounting "gimmicks" corrected their balance sheet and that is proof enough for you that all is well. I wished I understood the logic behind your conclusion, but I do not and you refuse to offer any assistance toward that understanding.

You win. I will not attempt to demean you any further by asking your opinion on the matter.

[GatorAvatar]

A multibillion-dollar stack of IOUs awaits state lawmakers when they return to Austin next year, and it’s a pile of their own making, the fruit of budget tricks that would leave Penn and Teller both speechless.

Gov. Rick Perry has a righteous gripe when it comes to the Legislature’s fiscal gymnastics. That part of his stepped-up “truth in budgeting” campaign has merit, but other parts we have a major problem with.

When lawmakers adjourned their session last year, they left a nearly $5 billion Medicaid tab uncovered and scheduled a late aid payment to schools to balance the books. Then there is their slippery practice of siphoning off taxes dedicated for one purpose and pouring them into the general fund.

The granddaddy of all diversions is the big grab out of the highway fund, where fuel taxes and fees are supposed to go for road- and bridge-building. More than $1 billion of that money will be spent this budget cycle on other uses. North Texas, meanwhile, is forced to build major highways with toll financing.

Last week, Talmadge Heflin, budget specialist with the Texas Public Policy Foundation, testified to lawmakers that “even people with advanced degrees have trouble tracking funds in the budget, let alone the average taxpayer or legislator.”

In this light, Perry’s truth-in-budgeting call is a good one, yet we wonder why his mind blanked when he signed the state’s current smoke-and-mirrors budget 16 months ago, saying, “I am proud Texas will continue to live within its means.”

http://www.dallasnews.com/opinion/editorials/20121002-editorial-texas-budget-gimmickry.ece

[ArtDeco]

http://www.dallasnews.com/opinion/editorials/20121002-editorial-texas-budget-gimmickry.ece

I'm sorry, do you live in Texas or know something about their budget, or do you always take an "editorial" in a Dallas newspaper as fact?

BTW, props to North and south. About time someone who actually knows about the subject actually chimed in.
However, if California is actually making real headway, I'd like to think people of all political ideologies could be thankful and maybe learn something. I had heard Gov Moonbeam was making some tough fiscal decisions since taking office out there.

[ncgatr1]

yes, this is a projection.

So we are using comments like budget? A little premature don't you think?

[The_Graygator]

Originally Posted by 108
California's budget really didn't have many problems until the crash of 08 that left nearly every state reeling with a lack of revenue


:laugh: Ironic... the crash created and caused by who? The democrats. :laugh:

[neisgator]

This thread is funny.

[Dreamliner]

Flickers of hope in Kollyfornia: earlier this year voters in San Jose and San Diego slapped down public unions. And reportedly, voter turnout was way down this past November.

[gatordowneast]

108, give it up re CA and budget "surplusses". Another fantasy. Their only options are a bailout by the rest of us or bankruptcy. CA and Illinois (as Ron Zook called it) are in the same boat. Anyone with the resources and know how is getting out of CA and treating it like the rest of us...as a place to visit and vacation...while we can.

[Burke]

California is a basket case and has been for years.

They got so desperate out there that they even elected a Republican, Schwarzenegger, to do something about it. But unfortunately, he is a closet Dem.

[rivergator]

California is a basket case and has been for years.

They got so desperate out there that they even elected a Republican, Schwarzenegger, to do something about it. But unfortunately, he is a closet Dem.

you apparently don't know much about the state. The majority of California's governors have been Republicans. By 2-1.

[Dreamliner]

They've found a way to balance the budget by: (1) raising taxes and (2) paying back less money borrowed from rainy day funds than previously purposed.

Translation: they kicked the can down the road.

[myamiG8R]

california has its problems but trading away the world's 7th or 8th largest economy for mostly frozen, uninhabitable tundra or an island of unskilled laborers is nuts.....and isn't puerto rico already a US territory? Not much to gain there.

i am more focused on getting rid of the automatic 55 electoral votes to the democratic nominee not matter who or what he or she is...

[Gatoragman]

North, welcome to the world of Rivergator, rarely answering questions and just pointing at the messenger

[dangolegators]

Why do cons find it so upsetting that California might have balanced its budget?

[Gatoragman]

Not a single remark on this thread where a con is upset!!!! Maybe not believing the article as much as some, but no where do I see anyone upset.

[mastoidbone]

CA finances are horrible---mostly due to insanely high govt worker pay and benefits.
Unfunded liabilities are worth 500 BILLION.
Lets say that again 500 BILLION.

So if you ignore the LEGAL obligation of future pensions---which are SEVERAL TIMES LARGER THEN TOTAL BUDGET---things are great.
http://articles.latimes.com/2010/apr/06/opinion/la-oe-crane6-2010apr06

http://www.calwatchdog.com/2011/08/23/ca-admits-884-billion-unfunded-pensions/

[Dreamliner]

Not a single remark on this thread where a con is upset!!!! Maybe not believing the article as much as some, but no where do I see anyone upset.

They're probably just not buying it.

[Dreamliner]

CA finances are horrible---mostly due to insanely high govt worker pay and benefits.
Unfunded liabilities are worth 500 BILLION.
Lets say that again 500 BILLION.

So if you ignore the LEGAL obligation of future pensions---which are SEVERAL TIMES LARGER THEN TOTAL BUDGET---things are great.
http://articles.latimes.com/2010/apr/06/opinion/la-oe-crane6-2010apr06

http://www.calwatchdog.com/2011/08/23/ca-admits-884-billion-unfunded-pensions/

... and also if you ignore the fact that they've decided to pay back less money this year that they've borrowed from rainy day funds.

[wygator]

I think the trick is that balancing an individual budget year doesn't address the total accumulated debt of the state which, according to State Budget Solutions, is $617 billion or double the total debt of the state of New York.

http://hotair.com/greenroom/archives/2012/09/03/ouch-total-state-debt-tops-4-trillion-dollars-california-ranked-the-worst/

[dangolegators]

I think the trick is that balancing an individual budget year doesn't address the total accumulated debt of the state which, according to State Budget Solutions, is $617 billion or double the total debt of the state of New York.

http://hotair.com/greenroom/archives/2012/09/03/ouch-total-state-debt-tops-4-trillion-dollars-california-ranked-the-worst/

California has twice the population of New York, so you aren't saying anything here.

[DeanMeadGator]

you missed the last line and a half.......see..."...accounting gimmicks. The projected surplus is now the latest surprise."

they slashed their deficit and PROJECT a surplus with ACCOUNTING GIMMICKS

what did they do about all those inflated pensions...?

If California is doing so well, why have some well-known California cities filed bankruptcy under the recently enacted municipality bankruptcy sections of the Bankruptcy Code?

[Dreamliner]

If California is doing so well, why have some well-known California cities filed bankruptcy under the recently enacted municipality bankruptcy sections of the Bankruptcy Code?

I recently found out that San Bernardino is the second-poorest city in the nation of its size. It's almost Detroit-poor.

[DeanMeadGator]

Why do cons find it so upsetting that California might have balanced its budget?

Because it is false. If it was true, everyone would be happy.

The Obama administration has divided this country in a way I never thought possible. It is crystal clear that there is a huge fight between the parties, regardless of what is best for the country.

If you have children and/or grandchildren, as them what they think of us after we shamelessly ruin their futures by burdening them with a $20 trillion [or higher] debt. In previous generations, every parent wanted their child to have a life better than theirs. Contrast this with our endless consumption and retreat from our moral obligation to our children.

At 68 years old, I would gladly give up benefits [for which I have paid for the past 48 years] so our children and 6 grandchildren will have better lives.

We should all be ashamed of our gutless, selfish and immoral consumption of the economic futures of those who depend on us to make their lives better.

[DeanMeadGator]

there you guys go. If a liberal state balances the budget, it must be cheating.

Excerpt from Governor's Budget Summary:

As shown in Figure INT‑03, the debt
has already been reduced to less than
$28 billion. Under current projections,
it will be reduced to less than
$5 billion by the end of 2016‑17

[mocgator]

Why do cons find it so upsetting that California might have balanced its budget?

I will bet money that by Dec 31, 2013 that Cali's budget isn't balanced. Just wait until their anticipated tax revenues fall short of projection. It is absolutely guaranteed.

[dangolegators]

I will bet money that by Dec 31, 2013 that Cali's budget isn't balanced. Just wait until their anticipated tax revenues fall short of projection. It is absolutely guaranteed.

It's possible, but certainly not 'absolutely guaranteed'. It's just what you want to see happen so you can have your conservative worldview reinforced.

Now if you want to talk about states with budget issues and using accounting gimmicks to cover it up, let's talk Texas.

[myamiG8R]

Why do cons find it so upsetting that California might have balanced its budget?

THIS is the problem... no one is upset if california has a balanced budget, though some folks may question that california actually has a balanced budget...

but if someone calls something into question, YOU PEOPLE need to throw out a label rather than simply respond to the question...

example...conservative comment... i am not sure quotas are the best way of assuring people of all races equal opportunity to jobs... liberal response... RACIST!

example... conservative comment... should we really designate certain crimes as "hate crimes"? isn't pummeling someone to death deserving of the same punishment no matter the reason? liberal response... HOMOPHOBE...

there are many other examples...

[mastoidbone]

again--every state but 1 or 2 balances budget----does not mean it is financially healthy.

Again---lets talk about 500 BILLION in lavish pensions for govt workers who average pension is 72,000 a year for fully vested retiree today.

[dangolegators]

again--every state but 1 or 2 balances budget----does not mean it is financially healthy.

Again---lets talk about 500 BILLION in lavish pensions for govt workers who average pension is 72,000 a year for fully vested retiree today.

That, and we can talk about overpaid doctors too.

[wygator]

California has twice the population of New York, so you aren't saying anything here.

Just saying that despite projecting one year of a balanced budget, they have serious debt problems that are going to burden the states and taxpayers for years to come, perhaps indefinitely.