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Brown seeks to chip away at California's 'wall of debt'

SACRAMENTO — In 1991, the Legislature delayed a $168 million payment it owed to the state's largest pension fund by one day, into the next budget year — a simple shuffle to help balance the annual spending plan.

It never repaid the money, leaving the state one payment behind on what it owed to the California Public Employees' Retirement System for more than two decades and through three gubernatorial administrations, including that of former Gov. Arnold Schwarzenegger.

As the state kicked that debt forward through the years, the amount grew to more than $500 million. Each time the state uses such a cash shuffle to cover its deficit, it digs a deeper hole of debt for future budgets.

Gov. Jerry Brown says it's time to pay up. He wants to start reducing the state's debt and tens of billions more in accounting gimmicks, temporary loans and delayed payments. In all, the so-called "budgetary borrowing" equates to a $34.7 billion drag on the state.

That's only part of what Brown referred to earlier this week as California's "wall of debt" when he released his revised budget plan for the fiscal year that begins July 1.


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