LAO: Governor's Budget Not Balanced
The in-depth analysis of Governor Schwarzenegger's new state budget is out, and the Legislature's non-partisan analyst essentially says the numbers don't add up.
Legislative Analyst Elizabeth Hill says that expenditures in 2007-08 would outpace revenues by $2.6 billion. And while there is reserve cash left from the current fiscal year to help soften the blow, Hill projects the governor's plan would still leave the state short by $726 million. That's a far cry from Schwarzenegger's bold statement in January that his budget had wiped out the state's red ink.
Beyond that, the LAO report forecasts an even larger deficit in 2008-09 of $3.4 billion, and slightly smaller deficits throughout the rest of this decade.
There are several differences between Hill's lengthy report and the governor's own fiscal projections. But one of the most easily digestible may be this: the LAO says Governor Schwarzenegger's team has overestimated revenues in the coming year by a whopping $2 billion. The big difference, says Hill's report, is that her analysts think personal income tax revenues will be "weaker" than projected by the governor.
You can read the main portions of the LAO report here. No doubt there will be a lot of reaction, pro and con, from both the governor's folks and legislators throughout the day.
