“I believe the real revise will be in August when we see the 15 July tax revenues. I hope the budget funds only essential state roles and reduces spending without the urge to raise taxes and fees. We need to reopen California business safely and quickly to get people back to work. The state, counties and cities relying on a Federal bailout is not a budget strategy. We need to suspend upcoming regulations and mandates that will only further smother business as they attempt to recover."
The Governor's May Revision and the projected $54 billion deficit is a sobering reminder that California’s economy continues to free fall. California has far too long been living a cautionary tale of spending in the upper limit of forecasted revenues that year after year have increased the size of government. Bringing this year’s budget into alignment will require some tough choices. What we must do is enact real, long-term reforms to encourage jobs, reduce regulations and red tape to cut the size of government. As a state we also need to re-evaluate any policy that makes it harder for businesses to rehire workers, bring on contractors, or keep operating; including suspending AB 5. Workers have no place to earn a paycheck if businesses can’t keep their doors open. We must deal in this reality if we are to restore California’s economy.”
Assemblyman Brough offered additional observations on the May Revision:
Republicans Have Repeatedly Asked For Restraint in Spending
- I have cautioned against reckless spending for years, warning repeatedly that a downturn in the economy would result in having to make painful spending cuts. This health and financial crisis is unprecedented, but if prior spending had been more prudent, more responsible, California could have faced less dire budget cutting than we face now.
Rainy Day Fund – Proposition 2 (2014)
- The state’s “rainy day reserve” that Republicans championed for years, is why the state now has upwards of $16 billion set aside in “emergency funds”. While insufficient to cover the entirety of the budget deficit, these reserves provide protections to some one-time programmatic cuts and the ability to phase in other reductions more slowly, reducing the possible immediate impact especially during this public health and economic crisis.
No Budget Gimmicks
- Given the financial situation of nearly every California taxpayer, it’s clear that the answer to closing the $54 billion deficit should not be tax increases of any kind, nor increased regulatory fees or costs, nor kicking the can down the road through quasi-debt schemes. In both the June 2019 budget forecast and his January 2020 budget proposal, the governor forecasted the need for $1.8 billion in future “trigger cuts”—an accounting gimmick to make the budget look balanced in future years. Without that gimmick, those forecasts already would have shown future operating deficits, despite record revenues at that time. Gimmicks will not work here and there simply must be reductions in spending, as difficult as that may be.
Don’t Budget Expecting a Federal Bailout
- The Legislature has one month to pass a budget from the May Revision to the June 15 constitutional deadline. As we move forward with the abbreviated process, passing a budget contingent on federal assistance merely pushes the problem into the future, one that will look even worse and result in deeper cuts if the anticipated federal funding doesn’t materialize. As difficult as that may seem, operating on that assumption is the financially wise move, it will force us to bring spending back in line with existing revenues, protecting us and making our economy stronger in the end.
Assemblyman William P. Brough represents the 73rd Assembly District in the California Legislature, which includes the communities of Aliso Viejo, Coto de Caza, Dana Point, Ladera Ranch, Laguna Hills, Laguna Niguel, Las Flores, Mission Viejo, Rancho Mission Viejo, Rancho Santa Margarita, San Clemente, San Juan Capistrano and Trabuco Canyon.