PD Editorial: Golden State caught a break, but it's not a fix

Gov. Jerry Brown deserves credit for his attempts to control state spending over the past five months.

His efforts have included putting a freeze on hiring, banning discretionary travel for state employees, taking away cell phones and state-issued vehicles and, last but not least, persuading the Legislature to slash nearly $11 billion from a state budget that already had been cut to the bone.

But the governor has failed to find four Republican votes - two in the state Assembly and two in the state Senate - to advance the next phase of his plan, asking voters to extend taxes to help bridge the remainder of the budget deficit.

And now he faces one of his biggest challenges: An unexpected windfall. Thanks to a sharp increase in earnings for the wealthiest Californians, the state has experienced a $6.6 billion surge in tax revenue.

The influx of income provides welcome relief for a state that will see its budget deficit from drop from around $26 billion to $15 billion after the spending cuts and, now, around $9 billion. Thanks to the windfall, Brown has included in his May budget revisions an additional $3 billion for education.

But it's a mixed-bag for the state politically. This could make it more difficult for the governor to win approval for the tax extensions that the state still desperately needs.

Republican leaders in the Senate are already scoffing at the idea of extending taxes, calling it "ridiculous" in light of the windfall. This despite the fact that the state is still deep in the red, is closing state parks, slashing programs for the children, the poor and elderly and, if tax extensions aren't approved, would have to cut another $5 billion from public schools and community colleges next year.

Brown is pressing ahead with an adjusted plan that makes sense, even if it fails to attract Republican votes.

He's seeking legislative support for a continuation of a sales tax and a vehicle license tax now, followed by a public ratification vote in the fall. A planned income-tax rate increase would be delayed until 2012 under the governor's change of plans.

Brown's plan presents the best chance of giving the public the opportunity to decide for themselves how they want the state to address the final $9 billion gap in the state budget and, as the governor noted Monday, the state's "wall of debt."

It also gives the state its best chance of confronting its structural budget issues before, as has happened in the past, they get covered over by an improved economy.

Given the state's dependence on personal income taxes, and particularly on capital gains taxes, California has seen these kinds of wild one-time fluctuations in income before. Such windfalls can give the false impression that all is well, and the structural deficit problems are over.

But they only succeed in delaying the inevitable - another plunge.

We've seen it before. Let's not see it happen again.