ALAMEDA, Calif. — California Gov. Arnold Schwarzenegger announced plans to call a special session of the Legislature to deal with the state’s budget deficit when its new members are sworn in Dec. 6.
The announcement came in the wake of last week’s report from the state’s legislative analyst, Mac Taylor, estimating that California’s current-year general fund budget is $6 billion out of balance, with an expected structural deficit of $19 billion more for the next fiscal year.
“Legislators will have to face the ugly truth that we can only spend the revenues we have,” Schwarzenegger said.
The governor leaves office Jan. 3, when the newly elected Jerry Brown is sworn in. This is the eighth time Schwarzenegger has called a budget special session during his seven years in office.
The new proclamation is no more likely to solve the state’s persistent fiscal woes than the previous seven, according to Fred Silva, a former legislative budget staffer and senior fiscal adviser to California Forward, a state government reform advocacy group.
A special session isn’t that big a deal in California, with its full-time Legislature. “A special session is simply a procedural device,” Silva said.
“The value of them is that as a governor and a Legislature, you have a set of procedural rules and it focuses attention on the topic,” he said. “Schwarzenegger has often used them to highlight a specific issue.”
There is one other factor in the proclamation of a budget special session, said Schwarzenegger’s finance spokesman, H.D. Palmer.
The governor will declare a fiscal emergency, giving lawmakers a 45-day window to act on his deficit-reduction proposal. If they don’t respond by that deadline, lawmakers cannot adopt other legislation, or adjourn their regular session.
The proclamation, and the fiscal emergency declaration, will come Dec. 6, when the new lawmakers hold their first organizational meeting.
“That’s when the 45-day clock starts running,” Palmer said. By the time it stops running, Schwarzenegger won’t be governor anymore.
“I don’t know if it makes much of a difference,” Silva said of Schwarzenegger’s proclamation, because the lawmakers will be waiting for Jan. 10, when Brown is required to release his first budget proposal.
The budget problems persist, Silva said, because lawmakers and governors have been either unwilling or unable to change a structural misalignment between general fund revenue and spending.
The annual revenues coming into the general fund are around $85 billion, not counting soon-to-expire temporary tax hikes, and that’s not likely to change in the near future, Silva said.
Meanwhile, the state constructs its budget spending plan using, as a baseline, the cost of continuing to provide the current services authorized by law.
“The current-services budgeting model says, gosh, you’ve got to spend $110 billion,” Silva said.
“You’re going to have go get rid of the current-services model,” he said. “That slow-growing $85 billion bundle of revenue will never catch the growing current-services demands.”
