Dan Walters: California's big budget numbers can be bewildering

Even those in the Capitol have great difficulty making sense of California's chronically imbalanced state budget, so it's no wonder the outside public finds its big numbers so bewildering.

The availability of raw data on the Internet has, if anything, increased confusion because the numbers come with differing meanings that are not apparent to the casual observer.

Take, for instance, a recent report from the state controller's office on income and outgo that, among other things, said state general fund spending was running about $2 billion ahead of projections, while revenues were about $1 billion under expectations.

Many concluded that the state is $3 billion further into the hole. But to Department of Finance beancounters, the supposed overspending is just an anomaly of cash flow that will even out before the fiscal year ends next June 30, not a budget problem.

That same controller's report also showed state revenues running billions of dollars under those of the previous fiscal year, which fueled speculation that state fiscal problems were worsening. But it was comparing oranges to apples.

Some temporary tax increases that had been in effect a year earlier had expired, which meant less money coming into the state's coffers, not less taxable activity. And the current budget redirects about $6 billion in revenues to local governments to pay for the "realignment" of some functions from the state to counties, which also makes a year-to-year comparison invalid without adjustment.

When one does adjust, it turns out that the economy has picked up a bit, which partially offsets the expiration of those temporary taxes, but that revenue still falls short of fully financing ongoing spending commitments, especially for public education.

When the current budget was signed in June, it included a last-minute assumption that the state would get an extra $4 billion in revenue, but Gov. Jerry Brown now says it will get just half of that amount, and a billion dollars in automatic spending cuts will partially make up for the shortfall.

Thus, the state could end the current fiscal year with a deficit, unless revenues show another spurt, and the general fund shortfall will be about $13 billion in 2012-13. Brown wants to cover half of that gap with another temporary tax increase that would raise about $7 billion in income and sales levies.

Another source of popular confusion is the size of the budget itself.

The political angst is centered on the general fund, which is in the $90 billion range. But the state actually spends more than $250 billion when about $70 billion in federal funds, plus special funds (such as gasoline taxes), state employee pension payouts and borrowed bond funds are included, according to a recent Census Bureau report.

As if we didn't have enough big numbers already.