Sacramento, CA — The Legislative Analyst’s Office says California is facing a much smaller deficit of $1.9 billion through the end of the next fiscal year. The nonpartisan analyst group says there could even be budget surpluses over the next few years. This comes just one week after Californians approved Governor Jerry Brown’s sales and income tax initiative. It raised the sales tax and income taxes on those who make over $250,000 a year. The group released its budget outlook on Wednesday.
In the report the group states, “The state’s economic recovery, prior budget cuts, and the additional, temporary taxes provided by Proposition 30 have combined to bring California to a promising moment: the possible end of a decade of acute state budget challenges. Our economic and budgetary forecast indicates that California’s leaders face a dramatically smaller budget problem in 2013-14 compared to recent years.”
The group says two things need to happen for the surpluses to happen. Congress must avoid pushing the national economy off a “fiscal cliff” and Sacramento lawmakers must avoid overspending if state revenues do rise.