Budget Deadlock Still A Likely Scenario In California In 2009

September 22, 2008 8:23 a.m. EST

Sacramento, CA (AHN) - Even if California's budget impasse problem has been solved with legislators giving in to Gov. Arnold Schwarzenegger's three conditions, state officials warn the ugly battle between the legislative and executive departments may be repeated next year.

They pointed to the economic slowdown, uncertainties about future lottery income and political deadlock among California legislators as likely reasons behind the grim outlook.

The legislature passed on Friday the $104 billion general fund budget that tried to bridge a $17 billion deficit for the current fiscal year. Nine months from now, California will likely stare at another budget gap from a minimum of $1.6 billion to as high as $7 billion. The possible ballooning of the budget deficit will arise from California voters' response to the governor's plan to borrow against future state lottery sales to have $5 billion next year and the year after that.

John Ellwood, a professor at the Goldman School of Public Policy at UC Berkeley, explained to San Francisco Chronicle, "All these (projected deficit) numbers will be dwarfed if in fact we are heading into a serious recession because with what's happening nationally - the credit crunch, people spending less money - projections will go into the toilet."

Meanwhile, because of the 84-day delay in the approval of the state budget - the longest in California's history - Democratic leaders are planning to amend the two-thirds vote requirement to approve the budget. The issue was brought before California voters in 2004, who thumbed down the proposal 2-to-1 and to bring down legislature vote threshold to raise taxes from 66 to 55 percent.

Only three states - California, Arkansas and Rhode Island - require a super majority budget vote. California is the only state where the governor has line-item veto authority.

This year's almost three months delay highlights the need to bring back the issue to California voters in 2010 or next year if there will be a special election, said incoming state Senate President Pro Tempore Darrel Steinberg and Assembly Speaker Karen Bass.