Analyst: State Budget Needs More Cuts
The Legislature´s budget analyst calls the governor´s latest spending plan precariously balanced on a mix of tax increases and borrowing that needs to be supported by more spending cuts. Noting that half of the governor´s plan for closing a record budget deficit would come from borrowing, Legislative Analyst Elizabeth Hill says carrying so much debt would limit the options and flexibility of lawmakers in the future.
However, Hill didn´t say how much borrowing would be too much, saying those decisions are better left to Wall Street investors who would ultimately lend the state the money.
Driven by the national recession and a big drop in tax collections, the state will have a shortfall at the end of this fiscal year of about $10 billion. The spending gap could grow to $38.2 billion by next July, according to the governor´s office, although legislative action has already cut about $14 billion from the gap.