Calif. Analyst Projects Budget Shortfall, More Deep Cuts
Wednesday, November 16, 2011
California's nonpartisan fiscal analyst on Wednesday said the state is projected to face a $13 billion budget shortfall in the next fiscal year, suggesting that Gov. Jerry Brown and state lawmakers will have to make another round of spending cuts.
Under the budget plan passed last summer, a shortfall of that magnitude would trigger cuts to public schools, higher education, services for seniors and health care programs for the needy.
A series of automatic cuts will take effect if the Legislative Analyst's Office or the governor's Department of Finance project revenue that is lower than lawmakers anticipated when they passed the budget last summer. The finance department will release its projection by Dec. 15.
The $86 billion state budget was based on a combination of spending cuts, fee hikes and projections of higher tax revenue in the months ahead. Republican lawmakers, who opposed tax increases, had warned that the revenue projections were overly optimistic.
"Unfortunately, there are few easy options left for balancing California's budget," the legislative analyst wrote in the report released Wednesday. "Difficult program reductions already have been passed, and significant one-time budget actions may be more elusive than in prior years."
Citing a slower-than-expected recovery in the housing market and high unemployment rate, the analyst projects that Brown's administration will likely have to make midyear reductions.
The analyst projected that state tax revenue in the current fiscal year will fall $3.7 billion below the $88.4 billion the governor and state lawmakers had hoped would be brought in. Under provisions of the budget, the shortfall would translate into $2 billion of automatic cuts.
This includes $100 million cuts each to the University of California, California State University, developmental services and in-home support for seniors and the disabled. Community college fees would increase $10 per unit, and reductions would be made for child care assistance, library grants and prisons, among other programs.
Additionally, because revenue is projected to fall short by more than $2 billion, the state would cut public school funding, an amount that will have to be determined by Brown's finance director. That could lead to shortening the school year up to seven days.