State Treasurer Bill Lockyer gave thumbs up today to the budget deal struck by Gov. Jerry Brown and legislative leaders.
Hours before the plan was set for a floor vote in the Assembly and Senate, Lockyer called it a "very important step forward in restoring California government to fiscal good health."
Unlike the budget proposal vetoed by Brown nearly two weeks ago, Lockyer characterized the new pact as "financeable," meaning fiscally viable and sufficient to borrow against.
"Our analysis indicates the plan reduces the need for external cash borrowing by as much as $2 billion, saving significant borrowing costs," Lockyer said in a letter to Brown, Assembly Speaker John A. Pérez and Senate President Pro Tem Darrell Steinberg, all Democrats.
"Perhaps more significantly, this budget, for the first time in recent years, honestly and clearly balances revenues and spending," the treasurer said of the plan, crafted by Democrats.
Lockyer also touted billions of dollars in budget cuts adopted earlier this year, saying the action "makes substantial progress toward eliminating California's large and chronic structural deficit."
Lockyer concluded his analysis by saying, "Many Californians will now confront hardships as a result of the very large cuts in vital services. I know these decisions were extremely painful for you to make.
"Nevertheless, today's budget plan represents a necessary and very important step forward in restoring California state government to fiscal good health."
The new proposal abandons the notion of temporarily extending higher sales and vehicle taxes as a "bridge" to a fall election. Its linchpin is a projection that the state will receive another $4 billion in extra revenue in 2011-12 based on strong tax receipts in May and June.
If revenue falls short, cuts will be triggered, including the possibility of a seven-day reduction in the school year.