SAN FRANCISCO — California’s Legislative Analyst’s Office said Gov. Jerry Brown’s proposed budget policies could lead to a balanced budget within a few years.
The nonpartisan LAO said in a report Friday that if the state sees steady economic growth, California “would stand a good chance of achieving budgetary balance within a few years under the governor’s May Revision proposals.”
However, the office still projects a $1.6 billion operating deficit during fiscal 2014.
The LAO in the report forecasted lower revenues and higher spending — $94.9 billion of general fund revenues and $96.5 billion of expenditures for the fiscal year starting in July 2013 — based on Brown’s current budget policies.
But the LAO anticipates a strengthening of property tax revenues due to the dissolution of redevelopment agencies in the state and improvements in the housing market.
In the May Revise, Brown projected a budget gap of $15.7 billion for the fiscal year that starts July 1.
The Democratic governor’s proposed remedies for the deficit include cuts of $8.3 billion to education, Medicaid and social services, along with $5.9 billion in higher revenues, partly from a proposed temporary tax rate hike and tax revenue expected from Facebook Inc.’s initial public offering.
In a report earlier this month, the LAO said it projects a general fund deficit of about $1 billion by June 30, 2013, rather than $1 billion of reserves as anticipated by the administration.
The office said it is concerned Brown has overstated by around $900 million how much property tax revenue schools will get from the closing of RDAs over the next 13 months.
It also has projected the governor’s tax policies will bring in $500 million less revenue than expected.
Lawmakers are expected to focus on next year’s budget after the state’s June 5 primaries.