LAO Gets It Partly Right

Dear Legislators,The first sentence of LAO's Multi-Year Budget Outlook published yesterday comes with an important disclaimer: This report presents our office’s independent assessment of the condition of the state General Fund budget through 2024‑25 assuming the economy continues to grow. With that assumption in mind, LAO counsels you to add $12 billion to reserves: To … Continue reading LAO Gets It Partly Right

CA’s Revenue Forecasts

24 months ago, California's Department of Finance forecast $151.8 billion of revenues in 2022-23 from the three largest sources: 12 months later, DOF revised that forecast down $30 billion: 12 months later, DOF revised it up $53 billion. The reality is that neither DOF nor anyone else has any idea what California's tax revenues will be in 2022-23 or … Continue reading CA’s Revenue Forecasts

Our View Of The May Revision to the Governor’s 2021-22 Budget

Dear Legislators,We have reviewed the May Revision to the Governor's Proposed Budget for the 2021-22 fiscal year, which starts July 1. Our views are summarized below: Unreliable Revenue Projections.Just seven months after the May Revision a year ago, the Department of Finance revised its projections for General Fund revenues for the current (2020-21) fiscal year … Continue reading Our View Of The May Revision to the Governor’s 2021-22 Budget

DOF’s March Finance Bulletin

Dear Legislators, As usual, DOF's latest Monthly Finance Bulletin is filled with data of relevance to your responsibilities:Jobs: California's unemployment rate fell to 8.3 percent, still much worse than the national unemployment rate, which fell to 6.0 percent. Our non-farm job levels are still 1.6 million below the pre-pandemic level of 17.6 million and Personal … Continue reading DOF’s March Finance Bulletin

Budget Amnesia In Sacramento

We have a lot of friends in the CA State Senate but we take issue with their recent assessment that “a decade of responsible budgeting enabled California to endure the recession.” That isn't factual. Here's how the 2020–21 Budget they enacted last June closed a forecasted pandemic-related deficit: Only 16 percent of the solution came … Continue reading Budget Amnesia In Sacramento

Underfunded Kids, Overinsured Retirees

The Governor's Budget projects deficits down the road but that's no reason not to enact worthy programs with savings from eliminating unworthy programs, and especially those contributing to the structural deficit to which Governor Newsom refers in his budget message. For example, Senator Skinner has introduced a spot bill to establish Universal School Meal and … Continue reading Underfunded Kids, Overinsured Retirees