The Legislative Analyst's Office will release a new report today analyzing the woeful state of California's finances. It will flesh out last week's estimate that the state faces a $27.8 billion deficit over the next 19 months.
But a new report from Beacon Economics predicts things will look even glummer in the future:
- Labor markets are showing increased signs of stress.
- There is little sign of a recovery in housing, and foreclosure rates are growing worse by the day.
- Consumer markets have fallen off a cliff.
- Corporate profits are taking a serious beating.
The report commissioned by California Forward, the nonpartisan government reform group, describes itself as "decidedly more pessimistic" than the LAO or Schwarzenegger administration projections, largely due to lower projections for corporate taxes.
The report also predicts the first year-over-year decline in statewide property taxes "since the Great Depression," according to Fred Silva, fiscal policy adviser to California Forward.
"Our forecast implies that we are quite literally on the edge of a fiscal cliff," the report says, rather bluntly.
Then there is this gem of analysis: "At the moment, California's budget strategy seems to adhere to a slightly different logic, one that might be summed up as: Hope for the best and ignore the obvious."
And they write that as if it's a bad thing.
In her visit with the Capitol Bureau on Wednesday, Assembly Speaker Karen Bass gave her own take on the role of partisanship, ideology and political futures on the budgetary stalemate:
"One of the reasons why it's hard for my Republican colleagues to vote for revenue -- more important than their tax pledge -- is their next primary," Bass said.
"If they vote for revenue, then they're going to be easily challenged in another primary. But the Democrats face the same thing: If we vote for deep, permanent cuts in health and human services, then we have to face our next primary, too."
Bass said putting aside self-interest would be key to break the logjam. "When you're in the middle of a national and international meltdown, you have to get beyond your career."
Speaking of deep cuts to health care, Health Access, a group dedicated to staving off such spending reductions, celebrates its 20th year of existence today with an event at the Sacramento Convention Center.
Among the speakers set for the event are Sacramento reps Darrell Steinberg and Dave Jones, the incoming pro tem and chair of the health panel, respectively.
Not bad allies to have in these times...
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