Arnold's Budget Goes Poof!

It took 52 days for the California legislature to approve a budget, and now it's taken just shy of that -- 50 days by my reckoning -- for said budget to fall flat. The Sacramento Bee reports:

Based on major tax receipts collected in the first two months of the new fiscal year, California could face a $8.6 billion operating deficit or more in 2008-09 if the state's economy and soft housing market continue at the current pace. That would be 40 percent higher than the $6.1 billion gap officials anticipated in August.

"It's fair to say the revenue situation is not going to be as good as we had hoped," Finance Director Mike Genest said in a recent interview. "It's likely the $6.1 billion (projected operating deficit) will be higher."

The key word here is "hoped." This was a budget based on hoped-for, but unrealistic, expecations in light of a cooling economy and the housing-market bust.

The budget -- all $145 billion of it -- reflects the continued boom in spending since Gov. Arnold Schwarzenegger booted Gray Davis and his piddly $100 billion budget four years ago. It also now seems to reflect a return to Davis-era deficits.

But at least Schwarzenegger hasn't increased taxes -- yet.