1996 | NDP: The orig­i­nal 'fudge-it bud­get'

Vancouver Sun - - CITY -

Pre-elec­tion sur­plus: $201 mil­lion over two years Post-elec­tion deficit: $703 mil­lion over two years

The fudge: NDP politi­cians and back­room op­er­a­tives kept in­flat­ing rev­enue pro­jec­tions to in­fuse the bud­get with ' more op­ti­mism' while hop­ing for a ' rev­enue mir­a­cle' that never ar­rived.

Back­ground: The NDP gov­ern­ment wanted to run for re-elec­tion on bal­anced bud­gets. So it drafted a 1995/96 bud­get with a $114-mil­lion sur­plus. As the econ­omy slumped, Fi­nance Min­is­ter El­iz­a­beth Cull de­cided to in­sert more ‘op­ti­mism' into her rev­enue fore­casts to com­pen­sate. Back­room staff took it fur­ther, craft­ing fore­casts that Cull later ad­mit­ted went beyond her com­fort level.

Af­ter­math: Com­pound­ing prob­lems, the NDP built the next year’s bud­get es­ti­mate (an $87-mil­lion sur­plus for 1996/97) upon the pre­vi­ous year’s fudge.

After the NDP won re-elec­tion in May 1996, Premier Glen Clark ad­mit­ted he needed ‘a lit­tle bit of wig­gle room’ on the num­bers. The 1995/96 bud­get was ac­tu­ally a $318-mil­lion deficit, and 1996/97 was $385 mil­lion.

Fi­nance Min­is­ter El­iz­a­beth Cull and Premier Glen Clark.

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