ALAMEDA, Calif. — California’s Legislative Analyst’s Office just raised the price tag for solving the state’s persistent budget deficits.

The nonpartisan LAO released its annual budget outlook report Wednesday, and the picture it painted is bleak: lawmakers and the incoming governor, Jerry Brown, have a $25 billion budget problem to solve when they put together the budget for the fiscal year that begins July 1.

Brown, who will be sworn in Jan. 3, must deliver his initial 2011-2012 proposal by mid-January.

Such deficits will continue into the foreseeable future unless the state’s leaders tackle the structural problems that create them, the LAO report said.

“The state faces a basic choice: begin to address today’s huge, frustrating budget problems now,” according to the LAO, “or defer the state’s budgetary and policy problems to future ­Californians.”

The intractable nature of the budget problems has made it difficult for elected officials to pass a budget. The budget is routinely delayed, but this year marked a record. The 2010-11 spending plan was not approved until October, 100 days after the fiscal year had already started.

The budget for the fiscal year itself is actually balanced — the LAO projects general fund spending of $92.5 billion in the current fiscal year.

Unfortunately, California closed fiscal 2010 with a $5.4 billion negative general fund balance, which will essentially be carried forward into fiscal 2012, according to the LAO.

Without any changes in law, the problem gets much worse during the next fiscal year, the office projects: if no corrective actions are taken, and current policy and law go forward unchanged, California faces a $19 billion general fund budget deficit in fiscal 2012.

The agency projects about $83 billion in general fund revenue, and $102 billion in spending.

The revenue decline largely reflects the scheduled expiration of temporary increases in sales taxes, income taxes, and vehicle license fees adopted in 2009. Those temporary tax hikes brought more than $8 billion to the general fund in both fiscal 2010 and fiscal 2011.

The fiscal 2011 budget that was adopted in October also included several non-recurring revenue sources, and relied on optimistic assumptions of federal revenue that look even more unrealistic after the GOP took over the U.S. House.

The LAO forecast already assumes no cost-of-living or inflation adjustments for state programs or state employee wages.

It also doesn’t see things getting much better anytime soon.

“We project annual budget problems of about $20 billion each year through 2015-16,” the LAO reported.

“Because our methodology generally assumes no cost-of-living adjustments, our projections probably understate the magnitude of the state’s fiscal problems during the forecast period,” the LAO said.

The report provides a grim picture of California’s fiscal future just as the state treasurer’s office begins marketing $14 billion of debt it plans to sell this month, including $10 billion of revenue anticipation notes pricing next week.

The LAO report foresees no problems in managing the Rans and their repayment next year.

“The state will likely require significant external cash-flow borrowing again in 2011-12,” the report said.

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