Wednesday, November 16, 2011

BREAKING: Legislative Analyst Forecasts $13 Billion Deficit, Trigger Cuts

File this under "the more things change, the more they stay the same." On the heels of a grim report on the state's finances from Controller John Chiang, the Legislative Analyst's Office has released their own report on what sort of tax revenues California might expect for the remainder of the fiscal year. And, well, skeptical as one might be about Sacramento's willingness to follow through on the budget's mid-year "trigger cuts," it's looking like they might not have much choice.

Please disperse. Nothing to see here.

According to the LAO, California is expected to fall about $3.7 billion short of the $4 billion in extra tax dollars that Jerry Brown and Democrat lawmakers laughably assumed would "balance" the budget. Unless another equally laughable accounting maneuver can be found, the state will need to cut $2 billion in spending next month. K-12 education would lose $1.4 billion, the Cal State and UC systems would lose $100 million each, and services for disadvantaged Californians would lose hundreds of millions as well. Since the teachers' unions won a gift from the Legislature, whereby the trigger cuts can't include teacher layoffs, it's likely the K-12 cuts will come in the form of a shorter school year.

If that's not enough good news for you, the state has a projected budget deficit of $13 billion. That is, it has a $13 billion deficit if you assume that the trigger cuts and everything else cut this year become permanent, and spending stays flat. If you factor in the $12 billion increase in spending that Brown is planning for next year, the deficit almost doubles.


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