The Latest Budget Ever?

The budget is almost always passed late in California. But this year, there haven't been any real negotiations -- even though the constitutional deadline for putting a new budget in place, the beginning of the fiscal year (July 1), passed last week. Why the slow start?

Because legislators and governors only respond to outside pressure. And there's precious little pressure for an on-time budget this year, as Shane Goldmacher points out in Sunday's LA Times. One reason: the courts have required some vulnerable programs to be funded. Another reason: various programs that rely on state funds have become so accustomed to the budget delays that they've figured out how to plan around them.

In fact, it's a pretty good bet that the budget won't be passed until the fall. None of the key players -- legislative leaders of both parties and Gov. Schwarzenegger -- seem to have any kind of incentive to pass a budget quickly. Schwarzenegger has indicated that he is prepared to hold out on signing a budget until he gets change in the pension system that he wants. Depending on how hard the governor pushes, it's possible to imagine a budget stalemate that stretches to Thanksgiving.

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A more likely scenario is a budget in September when, according to state cash flow estimates, the state could begin to run out of cash. In this era, only the threat of running out of money -- and having to issue IOUs -- turns negotiations serious.

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