When is a prediction of a $1.9 billion shortfall actually considered good news?
In deficit-battered, recession-weary California, that's the case.
It sounds strange, until you consider that it sounds a whole lot better than the staggering $41 billion deficit projected at the end of 2008 -- and much better than the $25 billion hole that the state's Legislative Analyst was forecasting in 2010. And much more rosy than the $16 billion shortfall Gov. Jerry Brown was projecting just last spring.
On Wednesday, the Analyst's office -- respected for its nonpartisanship -- said its $1.9 billion deficit estimate covers the next year-and-a-half. The report cast the state's recovering finances in a favorable light, thanks to earlier budget cuts and the voter approval of Proposition 30.
"The additional, temporary taxes provided by Proposition 30 have combined to bring California a promising moment: the possible end of a decade of acute state budget challenges," the LAO report said.
In fact, the report floated the possibility of the state actually running a surplus of up to a billion dollars by 2014.
But no one should break out the champagne just yet.
First, use of the term "surplus" gives the state's budget-writers heartburn, since revenues fluctuate all the time.
Second, and more importantly, this glimpse of a recovery depends to an enormous degree on Gov. Brown's ability to hold the line on new spending. After years of cuts, there's a lot of pent-up demand. Everyone will have their hand out.
The last time this happened, during the dot-com boom a dozen years ago, the state spent heavily on programs including schools; reducing class size and emphasizing teacher accountability. When the bottom fell out, the spending was unsustainable.
With Democrats sewing up a super-majority in the legislature, there are no Republican hold-outs to block spending increases. Even Gov. Brown, who has vowed to exercise restraint, could find himself outflanked if Democrats show enough unity to override a veto.
The Legislative Analyst's projections of a surplus are welcome news to a Capitol weary of budget strife and stalemates. But they are likely to lead to a different kind of conflict in 2013, a budgetary civil war between Brown and his fellow Democrats.