California's new budget deal relies on strong economy, $4 billion in extra income

Budget cuts

CHIOTAKIS: As Nancy mentioned, California's Governor, Jerry Brown, and majority Democrats in the state Assembly have agreed on a budget that could be voted on as early as today. The budget math relies heavily on a stronger economy and perhaps as much as $4 billion in extra income over the next year.

Bob Ward is an expert on state budgets and deputy director of the Rockefeller Institute. He's with us now. Good morning.

BOB WARD: It's good to be with you.

CHIOTAKIS: All right. What do you think about this plan in California?

WARD: Well, this is something of a step forward for California, in terms of honest budgeting. If the extra revenue that's included in the package does not arrive, there is a plan to deal with that by cutting spending. But I think overall it's fair to say this is still a mix of muddling through, responding to crisis, cutting services for people who need them and pushing costs into the future.

CHIOTAKIS: Depending on these rosy numbers, though, I mean what happens if they don't materialize?

WARD: Well, the governor and the leaders say they are willing to have the state automatically make some pretty significant spending cuts to education and other services. And I suppose from their perspective it's better to have at least some possibility of those expenditures going forward if the new revenue does come in. So it's sort of a compromise in terms of do we cut now, or do we cut later?

CHIOTAKIS: It sounds a lot like, Bob, "kicking the can down the road" though right?

WARD: "Kicking the can down the road" I think applies to affirmatively pushing costs into future years and onto future tax payers and there is some of that in this budget as well. I would be less concerned about, you know, we're going to plug in some spending, hope it materializes, and a few months later bite the bullet if we have to. So you know, budgets are written for the course of a full year. If they have to make some changes later in the same year, I don't see that as a big problem.

CHIOTAKIS: Well we'll have you back next year and see what we find out. Bob Ward, deputy director at the Rockefeller Institute. Bob thanks.

WARD: My pleasure thank you.

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