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'Bold ideas' in Jerry Brown's budget, but risks remain, California analyst says

January 12, 2011 | 12:16 pm

California’s chief budget analyst praised Gov. Jerry Brown’s initial budget plan, which mixes deep cutbacks and tax increases, as a "good starting point" to tackle California’s chronic budget deficits.

The fiscal review is far more flattering than the nonpartisan Legislative Analyst’s Office offered for many of former Gov. Arnold Schwarzenegger’s budget plans. In particular, the analyst’s office approved of Brown’s attempt not to patch over the budget problem with shaky and temporary fixes but austere -- and likely politically unpopular -- solutions.

“His proposal shows great promise to make substantial improvements in the state’s budgetary health -- both in the short run and over the long term,” Legislative Analyst Mac Taylor’s report said.

Brown says his plan includes a roughly 50-50 split of taxes and cuts, along with some shifting of funds, to fill an estimated $25.4-billion shortfall.

Still, some of Brown’s budget balancing relies on risky and overly optimistic assumptions, the analyst said. Proposals such as an unspecified cut of $200 million to the state’s bureaucracy are unlikely to succeed unless they are more fully fleshed out.

“Historically, such lack of detail often has been associated with budget actions that fail to produce the desired level of savings,” the report said.

Other proposed cutbacks have been tried before and become tied up in the courts, making them unlikely to succeed.

The analyst did embrace one of Brown’s most controversial ideas: the complete elimination of the state’s redevelopment program, which aims to spruce up blighted neighborhoods, calling it one of several “bold ideas.”

“We think this makes sense,” Taylor’s report said, citing the program's growing costs and “no reliable evidence” that it betters the state’s overall economy.

Brown’s plan relies on calling a special election and asking voters to extend current tax hikes on their purchases, incomes and vehicles for five years. The analyst questioned what would happen in the sixth year, when the state would yet again face “a substantial fiscal 'cliff.' "

-- Shane Goldmacher in Sacramento

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