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February 20, 2002 - We discuss the Governor's different types of budget balancing borrowing ($4.8 billion) and the factors that should be focused on by the Legislature in evaluating these proposals and other types of borrowing options.
February 20, 2002 - Perspectives on the state's fiscal condition and the budget proposed by the Governor for 2002-03. We find that the state will need to identify and additional $5 billion in budget solutions beyond those proposed by the administration.
February 20, 2002 - Based on our projections of revenues and expenditures, adoption of the Governor's spending policies would result in a year-end deficit of about $4.5 billion in 2002-03. This represents a $5 billion deterioration in the budget condition relative to the administration's estimate, which assumes a $511 million reserve.
February 20, 2002 - The U.S. and California economies are nearly one year into a recession that was initially caused by such factors as sharp declines in spending by businesses on capital goods, and then aggravated by the September 11 terrorist attacks. The downturn has been mild so far in terms of employment, although more severe in terms of income losses. Our forecast is that the recession will conclude in the next couple of months and that a sustained expansion will begin before mid-year. While employment will recoup its losses by the end of 2002, the decline in income related to stock options will be longer lasting. Our outlook is predicated on (1) a rebound in high-tech spending in the second half of the year and (2) the absence of significant terrorism-related disruptions to the national or state economies.
February 20, 2002 - The state is facing a major budget shortfall caused largely by an unprecedented decline in tax receipts. Specifically, General Fund revenues are projected to fall by over 14 percent in 2001-02, just two years after the state experienced a more than 23 percent increase. In addition, basic revenue volatility has increased in recent years, giving the revenue forecast greater uncertainty.
February 20, 2002 - We estimate that the state will need to identify $5 billion in additional budget solutions beyond those proposed by the administration. This compendium contains more than 100 expenditure reduction/revenue raising options to help the Legislature address this larger shortfall. In better fiscal times we would not necessarily put such options on the table, however we offer them in the context of a need to solve a growing budget shortfall.
December 19, 2001 - Due to weak economic and revenue performance, California faces a $12.4 billion budget shortfall in 2002-03. We identify several key budget-balancing principles and strategies and identify specific spending and revenue options for implementing these strategies. Finally, we review the administration's initial proposals to address the current-year shortfall and offer additional current-year options for the Legislature to consider.
November 14, 2001 - California will end 2001-02 with a deficit of $4.5 billion, while the 2002-03 budget year faces a shortfall of $12.4 billion and potentially even more if the recovery we are assuming for next spring is delayed. Annual budget shortfalls will persist well beyond 2002-03 absent corrective actions. Thus substantial ongoing expenditure cuts and/or revenue augmentations are required to bring the budget back into balance.
February 21, 2001 - The most pressing challenge currently facing the state relates to its electricity crisis, especially in light of the multiplicity of ways that energy affects the economy and ultimately the state's finances.
February 21, 2001 - Our "bottom line" budget estimates are similar to the administration's. Due to uncertainty related to the state's electricity crisis and to the very unsettled national and state economic environment the Legislature should withhold consideration of the Governor's $2.3 billion of one-time proposals outside of the energy area until May.
February 21, 2001 - Our "bottom line" budget estimates are similar to the administration's. Due to uncertainty related to the state's electricity crisis and to the very unsettled national and state economic environment the Legislature should withhold consideration of the Governor's $2.3 billion of one-time proposals outside of the energy area until May.
January 25, 2001 - Based on our findings, we recommend that the Legislature remove the existing sunset for the current partial Sales and Use Tax (SUT) exemption for bunker fuel sales, and make the exemption permanent. This action would result in treating bunker fuel sales similarly to other export sales and place California ports on par with other U.S. out-of-state ports. We also recommend that the Legislature review the appropriateness of current SUT treatment of fuel sales to common carriers other than vessels, including air and rail common carriers.
January 18, 2001 - The purpose of this primer is to address, in a highly graphical format, various questions, including: What are the different types of taxes upon which California relies? What is their relative importance, and how have they evolved over time? How large a "burden" do these taxes impose on Californians and how is this burden distributed? What types of policy issues are associated with the current tax structure?