Looking Under the Tree : Sacramento must do more than hope for holiday spending

Christmas decorations are already in the stores. The tinsel, lights and gift displays represent not only the hopes of individual merchants for a profitable holiday season but, increasingly, the collective hopes of the state for an end to California’s budgetary nightmare.

Reports that the state is accumulating a new deficit that will rise to as much as $3 billion by the end of the fiscal year mean that Gov. Pete Wilson and the Legislature must do more than just hope for a good Christmas season.

Lower-than-projected revenue collections triggered last month’s warning on the growing state deficit by the Commission on State Finance.

That warning was underscored this week by Standard & Poor’s; the bond rating firm says that California could lose its top AAA bond rating if it doesn’t move quickly to cure its chronic revenue shortages.

The governor and the Legislature thought they had done that last July when they approved the current budget, erasing an unprecedented $14.3-billion shortfall. But that budget was predicated on estimates that the recession would begin to bottom out last quarter. Sadly, there is still no light at the end of the recessionary tunnel, certainly not in California.

For that reason, the governor and Legislature must act now, before the problem gets worse.

A spokesman for the governor admits that more spending cuts will be necessary, given that the chance for an additional tax increase “is almost nil” and Wilson has no plans to call a special session of the Legislature. So what, then--wait until there’s nothing in the till? That’s not acceptable.

The current budget--with its new taxes and deep cuts in services--is causing great pain throughout the state. The best holiday wishes--and wishful thinking--are simply not enough to get us through these troubled fiscal times.