New Budget Already $8 Billion Out of Whack — Legislative Analyst Says

Less than one month after Gov. Arnold Schwarzenegger signed a budget aimed at closing a massive $42 billion gap between revenues and spending commitments, the state’s still deteriorating economy will add another $8 billion to the state’s revenue hole between now and June 30, 2010,  according to the Legislative Analyst. 

The Legislative Analyst’s assessment of the state’s fiscal outlook also says that because several of the key provisions of the recently enacted budget are short term, budget gaps will continue, growing to $12.6 billion in the fiscal year beginning July 1, 2010 and climbing to $26 billion in the fiscal year starting July 1, 2013.

Personal income will stay stagnant this year and begin to increase slightly in 2010, according to the report. But it will climb slowly over the subsequent five years. Employment won’t go up until 2011.

At risk in the current budget is another $6 billion in savings which won’t appear if voters reject three of six measures on the May 19 special election ballot — Propositons 1C, 1D and 1E.

“Our year of shared sacrifice is not over. As grim as it is, this forecast is not even the worst-case scenario facing California,” said Assemblywoman Noreen Evans, a Santa Rosa Democrat who chairs the lower house’s budget committee. “We must be prepared for more bad news to come.”

Echoing the Legislative Analyst’s findings, State Controller John Chiang’s monthly cash report, issued March 12, showed revenue collected in February was $1 billion below estimates. (See below.)

Go here for the complete Legislative Analyst report.


Filed under: Budget and Economy


  1. Well aren’t you just the grinch that stole the budget solution. C’mon, Gregster, did we give up when the Germans bombed Pearl Harbor? Where’s the half-full Lucas we all know and love? But, getting back to reality, is Ms. Evans hiding something? Not the worst case scenario? Are you kidding me? This is as bad as the state is a dog and you and I are wearing milk bone shorts. Pretty soon, Wally Webgas will be moving into a tent outside of Indio. And this one should get a double-sigh from Boyer. Going to a TG at the drywaller’s union hall in Stockton.

    Comment by Gus Turdlock — 3.13.2009 @ 3:23 pm

  2. I am hoping to upgrade my tent when the next recall is over and there is no need for a cigar tent in the horseshoe patio. I can see it now,
    the morning sun rising over Mecca (Bonnie Garcia’s home)as I roll off the astro turf laced with the stale smell of a white owl. Bonnie might get caliente when she hears the hummer bummer’s tent is in Mecca and not stuck on EBAY with a no tax pledge.

    Comment by Wally Webgas — 3.13.2009 @ 4:22 pm

  3. Gus and Wally are both idiots. They obviously don’t see the renewed sense of vigor that Mr. Obama has brought to the nation with his election. It will take awhile to dig out from mess created from the last administration.


    Comment by Les Hartwick — 3.14.2009 @ 9:04 am

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