Budget Surplus Projected For California
Sacramento, CA — The state’s non-partisan Legislative Analyst’s Office has released a new report projecting California will have a $7-billion budget surplus to start next fiscal year.
With the increased revenue the state’s reserve fund is anticipated to grow by about $2-billion, up to $18.3 billion. The report notes that the state should have enough money to make it through a typical recession, but also urges constraint in spending the new incoming revenue. The Legislative Analyst’s Office says there are signals that the economy could weaken, so it recommends only spending up to $1-billion for ongoing new programs. The report also indicates that the size of the surplus could be lower if the Trump Administration does not allow the state to tax groups that manage Medicaid plans. The tax is expected to generate $2-billion but is still awaiting federal approval.