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How State's Pandemic Budget Will Hit Schools and Services: H.D. Palmer Makes Things Perfectly Clear


H.D. Palmer has labored and lived through a lot of state budget crises under a lot of California governors.


He was there when Gov. Pete Wilson navigated the loss of one-third of tax revenues, as the state's defense industry withered away; when the dot-com crash induced a years-long chronic deficit and spoiled Arnold Schwarzenegger's plans to remake state government; when Jerry Brown soldiered through the Great Recession.


But Palmer, the veteran Deputy Director of California's Department of Finance, has never seen a state budget tank so swiftly and so broadly as has happened in the space of a few months, after Gov. Gavin Newsom shuttered California's economy to curb the spread of Covid-19.


"The revenues just collapsed," he told Newsmakers, in an interview about the budget crisis -- and what it means for public schools and many other services.


Palmer's job is to transform the higher math idiolect and budget geek-speak of the finance department's staff of analysts and researchers into plain English, and to help his boss, the governor, explain matters plainly and clearly to the millions of Californians affected by state's government's $200+ billion in tax spending.


That's what he did in our conversation, at a time when Sacramento is under economic siege and facing a $54 billion deficit - just four months after Newsom unveiled an optimistic spending plan for the coming fiscal year that fully funded schools, provided health care coverage to more vulnerable people than ever, added billions for new progressive programs, like early childhood education -- and delivered a surplus to boot.


Now the coronavirus has washed away that January proposal and the governor and Legislature are scrambling to adjust to the effects of a sudden and shocking statewide recession.


An old friend of Newsmakers, who's been helping us over three decades to understand the infernal complexities of public finance, H.D. in our interview breaks down the present problem with characteristic perspecuity, explains Newsom's proposed solutions and sets out several scenarios for where the fiscal crisis is headed, depending on the vagaries of national politics.


You can watch our interview with H.D. Palmer by clicking below. The podcast version is here.


(This is the first of a two-part series on how Californians will feel the impact of the damage Covid-19 has inflicted on the state budget. Tomorrow: an in-depth textual analysis of the numbers).


JR




Image: H.D. Palmer in his Capitol office.

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