Steve Wiegand: A familiar ring to this state crisis

You may have read about it. It was in some of the papers.

California is facing its worst state budget crisis since, well, the last state budget crisis.

Friday, Gov. Arnold Schwarzenegger announced he will be announcing a "fiscal emergency" next week. It's apparently not that much of an emergency, since the guv says it can wait until January to go into effect.

The guv's analysts said Tuesday there's a $14 billion deficit looming in the state budget over the next 18 months. That's $4.2 billion more than Legislative Analyst Elizabeth Hill estimated just 27 days before. That's an increase of roughly $156 million a day. At that rate, the deficit will be up to $45.4 billion by the start of the new fiscal year on July 1.

Of course that's not the way budget deficits work, so it probably won't get much bigger than, oh, $16 billion or so.

Still, as the late U.S. Sen. Everett Dirksen of Illinois was said to have said: "A billion here, a billion there, and pretty soon you're talking about real money."

Now, why should you, an average Californian, give a rat's patootie about state government running a budget deficit?

The short answer is "beats me."

Unless you work for some state or local governmental agency, do business with one, rely, directly or indirectly, on the state for some direct aid program or are buying state bonds and are worried about the state's credit ratings, it's not real clear why you should lose any sleep over it.

After all, there's nothing you can do about it personally. You're just an average Californian. You work to get money, which you then spend on stuff you need or want.

When you want or need more than you earn, you from time to time use credit to extend your spending capacity. If you get overextended, you move into the trailer behind your Uncle Spud's house down in Visalia and hope for better times.

Although the entire state government can't move to Uncle Spud's, it's my guess your elected leaders will once again do the equivalent of hunkering down and waiting for better times.

Budget deficits are a proud California tradition. The state's first budget, in 1850, was for $300,000, financed entirely with bond sales. By the end of the year, it was $132,000 in the red. That's equivalent to 44 percent of the entire spending plan. In contrast, the current deficit represents only 14 percent.

Then there was the Budget Crisis of 1933, when the state had only $92.5 million to cover $151 million in state obligations, plus faced another $76 million debt to pay for the state taking over public schools financing. Legislators and then-Gov. "Sunny Jim" Rolph solved that dilemma by enacting a state sales tax.

And who could forget the sobering Budget Crisis of 1991, when the Golden State was confronted with a $14.3 billion hole in a $55.7 billion budget. Legislators and then-Gov. "Cranky Pete" Wilson handled that with $7.2 billion in tax increases, $5.1 billion in spending cuts and $2 billion in parlor tricks.

The lesson here is that when it comes to the state budget, things always get better. Of course they get worse again, but then they get better again. And then worse.

Just listen to the words of one governor, who conquered a seemingly insurmountable budget deficit with hard work, bipartisan cooperation and unwavering courage:

"Our new operating deficit has been reduced to zero. You heard me right – we have reduced the operating deficit to zero. … Now, we all have to realize, however, that we must continue our discipline. We cannot slip back into the same old habits. … If we do that, our operating deficit can return as early as next year."

That, of course, was "Clueless Arnold" Schwarzenegger.

Last January.

About the writer:

• Call The Bee's Steve Wiegand, (916) 321-1076. Back columns, www.sacbee.com/wiegand.