Capitol Alert

The latest on California politics and government

California faces a $1.9 billion deficit through June 2014, significantly smaller than in recent years after voters passed two tax initiatives last week, the nonpartisan Legislative Analyst's Office said Wednesday.

The Analyst's Office said in its annual precursor to the budget process that California faces a small deficit because spending is higher than expected and the state will not receive as much as Gov. Jerry Brown predicted from shutting redevelopment agencies. It also believes other revenues from a managed care tax and cap-and-trade auction will fall short.

But the 19-month deficit figure of $1.9 billion pales in comparison to the $13 billion gap the LAO predicted last November or the $25 billion shortfall it foresaw two years ago. The deficit includes a $943 million deficit in the fiscal year that ends in June.

"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," the LAO said in its report. "Our economic and budgetary forecast indicates that California's leaders face a dramatically smaller budget problem in 2013-14 compared to recent years."

The Analyst forecasts the possibility of surpluses starting at $1 billion in 2014-15, growing to more than $7 billion in 2017-18. But that depends on Brown and lawmakers restraining program growth, and numerous advocates are likely to ask for existing cuts to be reversed given the additional money available.

Brown said in a statement: "This report validates the hard work the state has done to cut its deficit and balance its budget over the long term. California is now on the path for a fair and sustainable budget as long as we continue to exercise fiscal discipline and pay down debt."

The governor's Department of Finance told the LAO last week that it had discovered $1.4 billion in extra money from an accounting change. The Analyst's Office said that "adjustment" for the 2010-11 fiscal year was unusually large. Without it, the deficit would have been $3.3 billion.

Post updated with quote and additional details at 12:45 p.m. and 2:15 p.m.


More Capitol Alert

Capitol Alert on Twitter

Popular Categories

Now on


November 2013

Sun Mon Tue Wed Thu Fri Sat
          1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

Monthly Archives

Latest California Clips