November 18, 2015 - California's state budget is better prepared for an economic downturn than it has been at any point in decades. Under the main economic scenario in this year's LAO Fiscal Outlook, 2016-17 would end with reserves of $11.5 billion, assuming the state makes no new budget commitments through next year. If the economy continues to grow through 2019-20, annual operating surpluses and larger reserves could materialize, and there may be capacity for some new budget commitments—whether spending increases or tax reductions. An economic or stock market downturn, however, could occur during our outlook period. To illustrate this economic uncertainty, we provide projections under alternative scenarios such as a hypothetical recession that causes budget deficits to re-emerge. The more new budget commitments are made in 2016-17, the more likely it is that the state would face difficult choices—such as spending cuts and tax increases—later.
March 17, 2015 -
Living in decent, affordable, and reasonably located housing is vitally important to every Californian. Unfortunately, housing in California is extremely expensive and, as a result, many households are forced to make serious trade-offs in order to live here. While many factors have a role in driving California's high housing costs, the most important is the significant shortage of housing in the state's highly coveted coastal communities. We advise the Legislature to address this housing shortfall by changing policies to facilitate significantly more private home and apartment building in California's coastal urban communities.
See our February 9, 2016 follow up to this report: Perspectives on Helping Low-Income Californians Afford Housing.