Commentary: California's deficit figure is too low

The official party line – from both parties – is that the state has an $11.2 billion hole in its current budget and faces an additional $17 billion deficit in 2009-10.

Those numbers, however, are almost certainly too low, which is one of the many complications in the frantic search for a political solution.

Try as they might, even Democrats could come up with an array of new taxes and spending cuts adding up to only $16.2 billion over the two fiscal years, plus some bookkeeping maneuvers to pick up couple of billion more. That still left them $10 billion short of solving the problem as they defined it and even that package couldn't win approval, thanks to Republican opposition.

One of the Capitol's nightmare scenarios is that legislators and Gov. Arnold Schwarzenegger by some miracle cobble together a scheme to cover the current deficit number, only to find out later that it falls many billions of dollars short. They would have exhausted themselves politically, closing all options, without really solving the problem.

Privately, many of those involved in the budget believe that the deficit could easily top $15 billion this year and $20 billion next year, not only because the economy is continuing to contract and state revenues are continuing to decline, but because local property taxes are likely to fall short and the state is obligated to make up those shortfalls to schools.

Whatever the deficit's dimensions turn out to be, were the state's politicians to be brutally frank, they'd also admit that the gap ignores some big costs lurking out there on the periphery.

To read the complete column, visit The Sacramento Bee.