SAN FRANCISCO — California’s nonpartisan Legislative Analyst’s Office
The LAO said its revenue estimates for this and next fiscal year are just a few hundred million dollars shy of the administration’s projections for each year in the newly revised budget.
In the May Revise, Brown’s projected a budget gap of $15.7 billion for the next fiscal year.
The analyst’s office said it is concerned Brown has overstated by around $900 million how much property tax revenue schools will get from the closing of redevelopment agencies.
Brown estimated in his revised budget that shifting RDA cash to local governments, including school and community college districts, could reduce the state’s obligations to those districts by $1.4 billion.
“We find that the administration’s estimate of liquid assets available for distribution is subject to considerable uncertainty,” the LAO said in the report.
The analyst’s office said the state should try to achieve two main goals with the new budget: retiring the $7.6 billion accumulated deficit of recent years and address the structural deficit of around $10 billion.
“The governor has proposed numerous ongoing actions that would go a long way to addressing the operating deficit,” the LAO said.
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’s initial public offering.
If approved by voters in November, Brown estimates the tax measure would raise $8.5 billion over the next fiscal year. It would temporarily increase the state’s sales tax by one-quarter of a cent to 7.5% and taxes on income starting at $250,000, as well as raise taxes on those making more than $1 million to 13.3% from 10.3%.
Most experts anticipate lawmakers will accomplish little on the budget until after the state’s June 5 primaries.
