With the new year comes another budget stalemate in Sacramento.  Governor Arnold Schwarzenegger is expected to release his proposed budget for the 2010-2011 fiscal year.  Unfortunately, the Legislative Analysts Office report predicts that the state will already be suffering from a $6.3 billion dollar deficit during the 2009-2010 budget year, before the new budget is enacted.  Additionally, the LAO made the following predictions about the upcoming budget.

Over $20 Billion of Budget Problems Need to Be Addressed in Coming Months

According to the LAO report, the 2009-2010 budget has a $6.3 billion deficit and the 2010-2011 has a $14 billion projected deficit.  This means that the Legislature will need to address $20 billion in budget solutions before anything else.

Failed Budget Solutions Responsible for Newly Identified Budget Problem

The budget produced by the Legislature and Governor last year assumed certain budget savings that were never realized.  Specifically, the prison system and Medi-Cal were unable to achieve billions of dollars in expected savings.  Basically, the Legislature made unrealistic assumptions about how much money in savings could be achieved from these programs in the short term, without making the sweeping changes necessary.

No Way That California Can Avoid Reprioritizing Its Finances

California remains on the brink of insolvency.  The state’s payments are being made using accounting tricks that are not budget reforms, but rather stop-gap measures to keep itself afloat.  Expect a long budget fight again this year.

Unfortunately, the Legislature is probably not going to take up serious talks about the budget until after the Governor’s May Revision five months from now.  Is there a brave soul in the Legislature who will have real budget discussions prior to May?  Perhaps the new Assembly Speaker Juan Perez will take the issue up.