Mac Taylor smiled a lot on Thursday during his press conference to discuss Gov. Brown’s May budget revise. The State Legislative Analyst was in the unusual position of agreeing with quite a bit of the spending proposal. “We think it has many positives,” said Taylor, and gave the governor “credit for a budget that addresses the operating shortfall we’ve been struggling with.”

Specifically, the Leg Analyst called the plan to pay down school deferrals with the unexpected tax revenues a “wise use of the funds,” adding that “we would commend him for that proposal.” Brown’s revised budget plan would use $2.5 billion of the increased Proposition 98 guarantee to rescind an upcoming $2.2 billion deferral and to start paying down those already accrued. The Legislative Analyst’s Office report, Overview of the May Revision, also released today, states that, “By not creating new programs and instead paying down deferrals, the May Revision provides benefits to both the state and school districts.”

Taylor also agreed with Gov. Brown’s plan to shift mental health services from counties to school districts. But all that happy talk fell under a cloud of uncertainty over the tax extensions that will make or break the budget revision.

“I think everyone would agree that if you could do this without going to the voters that’s the best way because you know then at the start of the year the resources you have available to you,” said Taylor. As my TOP-Ed colleague John Fensterwald reported earlier this week, the governor wants to put the issue before voters in November, if not sooner. But Taylor said a November election “causes the most problems, because people can’t really plan for their fiscal year 2011-12,” and recommended that if it must go before voters as Brown wants, that should happen in June, before the start of the new fiscal year.

“For schools  it’s a case of what do they plan for now?” said Taylor. “They need to make decisions in the near term. How many teachers do you hire? What programs are you gong to operate? What they tend to do is be more conservative because it’s much easier to add back in a little later than to have to cut back mid-year.”

As it stands now, schools really don’t receive any additional money for programs even if the tax extensions are approved. According to Taylor, per-pupil programmatic spending goes up $40 under the revision, from $7,693 to $7,733.

The report cited three major policy proposals contained in the May revise:

1.  Shift mental health services from counties to school districts. The revise includes $389 million to support these services next year.

2.  Eliminate 27 K-14 mandates and reduce the costs of 13 K-14 mandates. $41 million in savings.

3. Eliminate funding for CalPADS and CalTIDES data systems.

Of those, the Leg Analyst urged the legislature to reject the proposal to cut off funding for the data systems.

Overall, Taylor and his staff are pleased at the governor’s efforts to pay down debt and create permanent solutions to shrinking the operating budget shortfall. “Let me just close in a way that I haven’t really done in recent times, and that is on a positive note,” said Taylor. “We’ve actually made some important progress and, as I said, to the extent that the legislature and the governor in the final budget act adopt a significant amount of permanent solutions, no matter what they are, we would have dramatically shrunk our operating deficit – our longer term problem going forward into the future.”