The headline reads, “State budget deal depends on borrowing, accounting tricks, and gimmickry.”
Which state is it?
In this case, California; the headline is from the Contra Costa Times. On Monday night the state made a deal to close its $26.3 billion deficit; the package includes $15 billion in spending cuts, and $11 million in accounting gimmicks, borrowing, and overly optimistic assumptions. These include:
- $2 billion borrowed from local governments’ property tax revenues (to be repaid with interest in 3 years),
- $2 billion in cuts to local transportation and redevelopment funds,
- $9 billion in payment deferrals to education, and
- Deferring state employee’s paychecks by one day – essentially putting $1 billion in salaries on next year’s ledger.