LAO: California Has Projected Budget Surplus
Sacramento, CA — California’s non-partisan Legislative Analyst is anticipating that the state will end the Fiscal Year on June 30 with a $2.8-billion surplus.
The discretionary funding could be used for any purpose and is in addition to $8.7-billion in required reserves that must be set aside for future budget emergencies. The report states that California, “is increasingly prepared to weather a mild recession.” It does point out that the projections are “subject to considerable uncertainty,” and specifically references the recent federal election. The projections are assuming that there are no immediate changes to federal programs and policies, and are based on current revenues the state receives. It also assumes that state does not approve any new programs that would result in additional spending.
Senate Republican Leader Jean Fuller is urging lawmakers to use caution in spending the surplus revenue. She says, “The report highlights uncertainty facing our state’s finances in the upcoming years, which underscores Senate Republicans call for a responsible state budget. It’s imperative next year’s budget should not miss another critical opportunity to prioritize state spending.”
The Associated Press reports that the the projected surplus signals a likely showdown between Governor Jerry Brown, who prefers cautious spending growth to prepare for a recession, and Democratic leaders in the Senate and Assembly eager to expand state services for low income residents.