California Budget Deficit Shrinks To $1.9 Billion With Taxes
Wednesday, November 14, 2012
California's nonpartisan budget analyst says the state now faces a much smaller deficit of $1.9 billion through the end of the next fiscal year and could even see surpluses after that.
The Legislative Analyst's Office released a positive but cautious forecast Wednesday in the state's first budget assessment since Californians last week approved Gov. Jerry Brown's sales and income tax initiative, Proposition 30.
"The state's economic recovery, prior budget cuts, and the additional, temporary taxes provided by Proposition 30 have combined to bring California to a promising moment: the possible end of a decade of acute state budget challenges," wrote analyst Mac Taylor.
Taylor projected a much smaller deficit of $1.9 billion through the end of the 2013 fiscal year in July 2013, compared with the $15.7 billion deficit lawmakers faced earlier this year.
He said state expenditures will be $2.7 billion greater than forecast in the 2012-13 budget, partly because of overly optimistic projections for how much the state would get from the dissolution of local redevelopment agencies that Brown initiated. Taylor said the state will see about $1.8 billion less than expected.
On Wednesday, the governor said the analyst's report validated his administration's work these past two years to reduce spending, streamline departments and make government more efficient.
"We've had cuts. We've had a lot of cuts. And with Proposition 30 we have some revenue. ... Together it puts the state in a very solid position for a sustainable balanced budget for years to come," Brown told reporters at appearance at a UC Board of Regents meeting.
The governor said he would like to see the state exercise fiscal discipline, pay down our debts and build a rainy day fund. "We're not out of the woods yet," he said.