Only in government is borrowing considered a legitimate way to balance a budget. In California it has become standard operating procedure.
To address this growing problem, the state’s Special Funds were the subject of a hearing last week in the Legislature, which I attended. The 500-plus special funds have been routinely raided over the last several years to “balance” the state budget. The now-preferred budget gimmick is to shift “special funds” into the general fund in order to call the budget “balanced.”
The Senate Budget Committee conducted the oversight hearing to review this practice, but only covered what amounted to less than 0.5 percent of the $4.6 billion in special funds that have been raided over the last several years.
Recent history
From 2007 to 2012, California had a $10.4 billion decline in its general fund, but a corresponding increase of $13.15 billion in its “special funds,” CalWatchdog.com’s Wayne Lusvardi reported in May 2012.
Last year, State Controller John Chiang reported California was patching its budget together by borrowing $4.3 billion from special funds accounts.
A few days later, the secret $54 million special parks fund was revealed.
Then-state Finance Director Ana Matosantos reported that the borrowing from special funds had ballooned to more than five times the borrowing amount since June 2008.
“Where are these dollars?” asked Senate Budget Committee Chairman Mark Leno, D-San Francisco. Leno said it was a “big problem” that the special funds “clearly have not been getting enough attention.
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