The Governor's Budget Proposal Monday, January 10, 2022
Governor Newsom unveiled his budget proposal for fiscal year 2022-23 which begins this coming July 1. As usual, the governor conducted a marathon news conference presenting the budget which he essentially memorizes. He was on camera for about two hours and fifty minutes (!) before turning the podium over to his budget director. That was, I think, a record, even by Newsom standards. What was not unusual was the fuzzy budget language used to describe the budget. As the image shows, he describes the budget as "balanced." If you take "balanced" in its common English usage of inflows (revenues) equal outflows, the budget is not balanced. It is in deficit.
Nonetheless, he describes the budget as being in "surplus" when - as noted - it is in deficit. He spends little time on the UC component. But it might be noted that UC gets a cut from what it received this current fiscal year. All of that said, the state can run an imbalanced and deficit budget and yet not be in bad shape for two reasons. First, the prior governor Jerry Brown left a relatively large reserve as a legacy when he left office in early 2019. Second, when the pandemic hit, it was assumed that the accompanying economic downturn would slash state revenues and thus budget expenditures were suppressed. However, it turned out that the downturn did not have the negative effect on revenues that it had on the general economy. The combined effect of having revenue substantially above projections in fiscal 2020-21 and suppressed 46
UCLA Faculty Association Blog: First Quarter 2022
