A court ruling last week serves as a reminder that even rejected state budget gimmicks can haunt taxpayers for years. Legislators should recognize that the best way to avoid trouble from such dubious schemes is to avoid those reckless ploys altogether. California needs honest budgets, not spending plans built on shortsighted expedients.
A Superior Court judge last week gave the green light to a lawsuit against the state over an abandoned budget gimmick from three years ago. A group that wanted to buy 11 state office buildings sued the state for breach of contract in 2011, after incoming Gov. Jerry Brown scuttled the sale. Last week’s ruling rejected the state’s push to dismiss the lawsuit, and allowed the plaintiffs to seek damages from the state.
The fight stems from a 2010 plan to sell 11 state-owned office buildings to private buyers, then lease the space back long-term. The $2.3 billion deal would have included $1.2 billion up front to help the state general fund bridge another in a series of huge, multibillion dollar shortfalls. Brown killed the plan after the state’s legislative analyst said taxpayers would have lost $646 million on the deal just in the first two decades.
The possibility that taxpayers might end up paying for this scrapped scheme anyway is simply galling. And the experience should serve as yet one more warning about the dangers of budget schemes that trade immediate gain for much greater long-term pain. Plugging budget holes now by piling up huge future expenses is an approach guaranteed to keep state finances in perpetual jeopardy.
Stabilizing state finances requires legislators to bring spending and tax receipts into ongoing balance. Anything else only postpones an honest fiscal reckoning.
And the state has no need to spend money defending dubious budget ploys in court. California can avoid those legal battles — if legislators will only abandon reckless fiscal schemes.