SAN FRANCISCO — California's nonpartisan Legislative Analyst's Office said in a report Wednesday it forecasts the state will face a $1.9 billion budget deficit for the next fiscal year.

That's actually good news, given the state's history of red ink.

"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 report said.

Proposition 30, approved by voters last week, imposes higher temporary sales and income taxes.

The legislative analyst said it expects the state will end the fiscal year in June with a $943 million deficit due to lower revenues from the past two fiscal years and higher expenditures, mostly due to lower-than-anticipated savings from the end of redevelopment.

As it stands, the LAO said it also projects the state is on course to have an additional budget gap of $936 million for fiscal year 2014, which begins July 1.

Last year, the Legislature and Gov. Jerry Brown had to close an estimated $15.7 billion budget gap for fiscal 2013 to pass a balanced budget as required by state law.

The budget hole that legislators and the governor must fill is much less than previous years.

The analyst's office also expects the state will see operating surpluses beyond fiscal 2014 through fiscal 2018, based on expectations of steady economic growth in the coming years.

It said its forecast shows California could have a surplus of $1 billion fiscal 2015, growing to more than $9 billion by fiscal 2018.

"This outlook differs dramatically from the severe operating deficits we have forecast in November Fiscal Outlook reports over the past decade," the report said.

The LAO said the surpluses are dependent on the Legislature and governor keeping a "tight rein on state spending." It recommends the extra money should be used to build a reserve.

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