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November 14, 2012 - The 18th annual edition of the LAO's Fiscal Outlook--a forecast of the state's budget condition over the next five years--shows that California's budget situation has improved sharply. 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. Our economic and budgetary forecast indicates that California's leaders face a dramatically smaller budget problem in 2013-14 compared to recent years. Furthermore, assuming steady economic growth and restraint in augmenting current program funding levels, there is a strong possibility of multibillion-dollar operating surpluses within a few years.
September 25, 2012 - Presented to Senate Elections and Constitutional Amendments Committee, Hon. Lou Correa, Chair and Assembly Elections and Redistricting Committee, Hon. Paul Fong, Chair
September 24, 2012 - Presented to Assembly Budget Committee, Hon. Bob Blumenfield, Chair
September 13, 2012 - The LAO’s annual "California Spending Plan" publication includes detailed descriptions of this year’s state budget package, as approved by the Legislature and the Governor. Included are highlights from the administration’s official scoring of the budget package. This final version of the publication reflects gubernatorial actions on budget-related bills through the end of September 2012. (Revised 10/4/12)
August 15, 2012 - Presented to Senate Budget and Fiscal Review Committee, Hon. Mark Leno, Chair
August 10, 2012 - Statements of legislative intent and requests for studies adopted during deliberations on the 2012-13 budget package. (UPDATED 1/9/13)
August 9, 2012 - Presented to: Assembly Budget Subcommittee No. 6 on Budget Process, Oversight and Program Evaluation, Hon. Bob Blumenfield, Chair
June 12, 2012 - Letter to Hon. Bob Huff, Senate Minority Leader, providing an updated analysis of "underlying" General Fund expenditures as of February 2012.
May 18, 2012 - In the May Revision of his 2012-13 budget proposal, the Governor identified a larger budget problem of $15.7 billion for state leaders to address in the coming weeks. While we find that the administration's economic and revenue forecasts are reasonable, we are concerned that the amount of property tax revenues from former redevelopment agencies (RDAs) may be substantially less than the May Revision assumes in 2011-12 and 2012-13. If so, this could increase the state's Proposition 98 school funding obligations and, therefore, the size of the budget problem above administration estimates. Moreover, the administration's $1.4 billion estimate for the amount of General Fund benefit that may be achieved in 2012-13 from transferring former RDAs' liquid cash assets to school districts is highly uncertain. We advise the Legislature to focus on adopting realistic and ongoing budget actions to continue the progress the state has made in reducing its annual operating, or structural, deficit. We describe and assess the administration's major May Revision proposals. In some cases, we offer alternative ways to achieve the savings targeted by the Governor. With regard to Proposition 98, we offer alternatives to both the Governor's basic budget plan and his trigger plan.
February 27, 2012 - There are plenty of mixed signals in economic data for California’s policymakers, as they continue to craft state and local budgets in a constrained fiscal environment. The economy now is clearly improving in many important ways, including employment growth, but significant impediments block the state’s path to a more robust economic recovery. Like the economic data, reports concerning state revenues have been mixed recently too, with weakness in income tax payments accompanied by speculation concerning a future bonanza of tax revenues due to the possible offering of stock by Facebook, Inc. This report provides our updated projections concerning these and other trends in the economy and state revenues.
February 22, 2012 - Presented to the Assembly Accountability and Administrative Review and Assembly Revenue and Taxation Committees
February 5, 2012 - We will release publications aimed at addressing the 2012-13 budget situation. These will include all major areas of the budget, including Proposition 98 and K-12 Education, Higher Education, Health, Social Services, Resources, Transportation, and Criminal Justice.
January 11, 2012 - The Governor’s proposed tax initiative is the cornerstone of his 2012-13 budget plan, which includes proposals to restructure education finance, reduce social services and child care programs substantially, and implement trigger cuts--primarily affecting schools--if voters do not approve the tax measure. The Governor’s plan would continue the difficult task of restoring the state budget to balance, but the difficulty in knowing how much taxable income will be attributable to high-income Californians makes the state’s revenue estimates an even bigger question mark than usual. With regard to the Governor’s major proposals, we think the Governor’s education restructuring proposals would institute lasting improvements to the system, and we observe that, while his social services and child care proposals have merit, they involve considerable drawbacks as well, given potentially severe impacts on affected families. Moreover, while the Governor’s tax initiative would improve the financial outlook of public education over the next several years, his trigger plan would create significant uncertainty for educational institutions in their planning for 2012-13. The Legislature needs to be very deliberate in structuring a workable trigger package and designing tools to help schools respond to potential trigger cuts.
December 5, 2011 - Presented to Assembly Revenue and Taxation Committee
November 17, 2011 - Presented to theAssembly Select Committee on Government Efficiency, Technology and Innovation and the Assembly Budget Subcommittee No. 4 on State Administration