Last week I saw "Magnolia" (a very long and very different, but very good, sort of movie) and "Toy Story 2" (a very entertaining and visually stunning picture), and finally got around to having dinner at San Francisco's famed Fog City Diner (very reasonably priced if you're not ordering a "large entree"). Finally, my friend Aaron, who was in my class at Vassar, moved to San Francisco from Albuquerque and is currently living and working with me.

Have a great week, and drop me a line if you feel like it.

-Gabe

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The document, typically three inches thick and weighing five pounds, is enormously complex. It is as much a political strategy as a spending plan, and it is altered dramatically between the time in January when it is introduced by the governor and the time -- hopefully in June -- when it is approved by the Legislature. Then, it is reworked some more when the governor goes through it and vetoes provisions he doesn't like. The final budget often bears little resemblance to the document that was unveiled with such hoopla six months before.

But last week, in the space of five days, the ordeal became vastly more confusing.

Last week, Gov. Gray Davis said that state revenues were coming in about $3 billion above expectations. His comments surprised nobody, because the fact that California's economy is booming has been well documented. The only real news in the governor's comments was the amount of the increase, not the fact that there was one.

But less than five days later, the Legislature's nonpartisan fiscal adviser, Legislative Analyst Elizabeth Hill, reported that revenues were expected to rise a full $3 billion above the increase just announced by the governor.

In other words, the revenue increase is now projected at $6 billion, not $3 billion. And the new figures have not been challenged by the governor's office, which will now be forced to rewrite the projections it just unveiled.

One veteran budget observer in the Capitol Press Corps dubbed Davis "the $6 billion man," and he asked the crucial question: "So, what's changed since Monday when the governor, unveiling an $88 billion spending plan for the new fiscal year beginning July 1, showed only half as much unanticipated revenue?"

Something odd is afoot. Something is haywire.

Revenue projections are exactly that -- projections. They are not carved in stone. They are guesses, based on the best available knowledge, of what is likely to happen.

But the governor's Finance Department, which writes his budgets, and the Legislative Analyst's office are working from essentially the same data. So the questions that arise from their disparity are intriguing.

How could these two departments offer such disparate pictures of the state's fiscal condition? Did Davis not know when he announced his budget of the revised revenue outlook? If he did, why didn't he say something? If he didn't, why didn't he know factors crucial to his own budget? If nothing changed in the scant few days that the conflicting budget projections were released, why aren't the two projections more in sync? If something did change, what was it?

Hill, a non-confrontational sort who, like all legislative analysts, tends to eschew political controversy, said the state's economy is showing dramatic strength, suggesting that this strength is at least partly responsible for the conflicting numbers.

But cynical Capitol observers are left wondering whether Davis deliberately low-balled the projections for reasons that have yet to become clear.

One possibility is that Davis, wishing to appear fiscally prudent, underestimated revenue projections in order to cover his political right flank. Another is that Davis knows about the new money, but hasn't yet figured out the most politically agreeable way to spend it. Another is his fear that the economy may sour and, if it does, he wants to avoid the political onus of too-high expectations.

Whatever the reason, the conflicting revenue pictures have made an already fractious budget year even more contentious. If the $6 billion estimate really does prove to be on target, Davis will have to deal with the uncomfortable political decisions of dividing the money. Such decisions are often more difficult than those accompanying shortages, as politicians well know.

The mystery deepens...

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