The nonpartisan state Legislative Analyst’s Office, in a report issued today, issued a bleak outlook for the state budget with projections of a $27.8 billion shortfall in the next 20 months.
This will almost certainly test the mettle of the California Legislature and Gov. Arnold Schwarzenegger in the coming months as they struggle to find a way through this economic mess.
Here’s what the LAO said:
“We concur with the administration’s assessment that the state’s struggling economy signals a major reduction in expected revenues. Combined with rising state expenses, we project that the state will need $27.8 billion in budget solutions over the next 20 months. The state’s revenue collapse is so dramatic and the underlying economic factors are so weak that we forecast huge budget shortfalls through 201314 absent corrective action. From 201011 through 201314, we project annual shortfalls that are consistently in the range of $22 billion.”
Click on this link for the full report: http://www.lao.ca.gov/laoapp/PubDetails.aspx?id=1893