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Daniel Weintraub

California Insider

A Weblog by
Sacramento Bee Columnist Daniel Weintraub

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« November 9, 2005 | | November 11, 2005 »
November 10, 2005

Good-bye Nissan

The Washington Post, via Instapundit, on Nissan's flight from California to Tennessee.

Posted by dweintraub at 7:45 PM



Early thoughts on the next budget

Liz Hill is expected to kick off the annual budget season next week with her five-year fiscal forecast that puts the state's economy, budget, revenues and spending in perspective. At last count Hill was projecting a $6 billion gap between spending and revenues in the 2006-07 budget year. That probably still holds, though it could drop a notch if Hill believes recent revenues that have come in higher than expected are likely to continue on that pace for the next year. Remember, Hill's number is an operating deficit for that 12-month period. It doesn't take into account the $1.3 billion that was budgeted as a reserve, nor the $1 billion-plus in higher revenues that already have come in. If you count that money and the $3.7 billion in bond money the governor also has in reserve, he presumably could do next year's budget without reducing spending from their currently projected growth levels.

But I am hearing from folks around the governor that we should expect some pretty stiff cuts from projected levels, especially in health and welfare (nobody expects him to touch education spending next year). That must mean that the administration is either preparing a fairly conservative revenue forecast or planning on a budget that does not use the remaining bond money.

Either or both approaches would be laudible as a matter of fiscal integrity. As a political matter, they might be more problematic. If Schwarzenegger proposes deep cuts in health and welfare programs in January, he better be serious about following through, and they better be part of a comprehensive plan that -- finally -- brings the budget back into balance on a permanent basis. Because as we saw last January, first impressions tend to stick with voters. And if their first impression this time around is that the governor is "attacking" the sick and the poor, that might be just enough to finish off his reelection hopes, even if he later pulls back. Californians may want to control spending in the abstract, but they clearly have a problem doing so when the real-life effects of that approach is put before them.

In the past, governors have proposed cuts in January that they knew they would withdraw in May. Doing so next year would be political suicide.


Posted by dweintraub at 10:49 AM



Ad buys: $90-million plus

A media consultant's study says more than $90 million was spent on television ads in the special election in the five biggest media markets, about $30 million by the governor and his allies and $63 million by his opponents. About $30 million was spent in the final two weeks alone.

Posted by dweintraub at 8:28 AM



 
 

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Daniel Weintraub



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