Analysis finds Brown budget is deficit-free, for now


The non-partisan Legislative Analyst says Governor's budget proposal is "roughly balanced," commending the Democratic leader for showing fiscal restraint.

But there are still concerns about California's financial health, such as long-term debt and teacher and state worker retiree healthcare not accounted for on the annual balance sheet.

"It doesn't pay all of the wall of debt within the time period," said Legislative Analyst Mac Taylor. "It builds up very little of a reserve by the end of that period, and it does nothing regarding our various retirement-related obligations."

Critics say had the governor accounted for retiree obligations, California still would have a deficit.

"If we were making all of the payments that we need to pay for our retirement benefits, we would be $9 billion in the hole. So the only way you can show we're not in the hole is by ignoring these obligations," said Dan Pellissier, president of California Pension Reform.

But the Brown administration says the spending blueprint addresses the problem, just not as fast as critics would like, because there's only so much money and the state has more pressing needs.

"Because we're paying it down on a scheduled basis and at the same time we're holding the line on spending," said H.D. Palmer, a spokesman for the California Finance Department. "We believe we've got a prudent road map to keep a balanced budget."

The Legislative Analyst also had concerns about how schools are being given Proposition 39 money. That's the voter-approved initiative to make campuses more energy-efficient. It's being counted as part of per-pupil spending.

"We've raised several concerns about whether the governor's proposal meets the specific language of Prop. 39," said Taylor.

Both the Legislative Analyst and the Brown administration agree that the state budget proposal could be turned upside down as soon as next month if California receives less money from the feds as a result of the debt-ceiling negotiations in Washington, D.C.

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