As Sacramento kicks off its yearly scramble to pass a state budget, lawmakers have yet to agree whether one controversial provision will make the cut: an untested $6 billion scheme that the governor says could save the state billions more but that some analysts warn has received too little scrutiny.
As part of his revised budget proposal issued earlier this month, Gov. Jerry Brown introduced a novel plan to make an early, super-sized payment on the state’s public pension obligations by borrowing from a little-known government account. State and local agencies currently face a $359 billion shortfall on pension and health benefits for public retirees, and this one-time payment would effectively double Sacramento’s scheduled contribution.
But the nonpartisan Legislative Analyst’s Office, which advises lawmakers on fiscal matters, says the administration has not provided enough evidence or analysis to back up its claims that the proposal will generate $11 billion in taxpayer savings. Moreover, the LAO said in a report last week, by introducing the proposal mere weeks before the drop-dead budget deadline of June 15, the governor “puts the Legislature in a difficult position,” with little time to vet the plan or weigh the potential consequences.
With such large sums involved, acting too quickly may mean signing on to a deal that, if its assumptions are wrong, could leave the state strapped for cash.