The Legislative Analyst’s Office today issued a fiscal forecast showing California’s state budget deficit for the fiscal year starting next July 1 will be almost $13 billion.
If the state Finance Department concurs next month, this could mean $2 billion in mid-year “trigger cuts” this year, mostly in the K-12 and higher education budgets.
From Gil Duran, spokesman for Gov. Jerry Brown:
“California’s budget gap is the result of a decade of poor fiscal choices and a global recession. This year, we cut the problem in half. Next year, we’ll continue to make the tough choices necessary until the problem is solved.”
From Assembly Speaker John Perez, D-Los Angeles:
“Today’s announcement by the LAO is indicative, but not determinative of the final decision on whether the budget triggers will be pulled next month and we must wait until the Department of Finance December forecast, which will have up to date information and certainly may alter the trigger calculation to lessen the level of trigger cuts.
“Given the uncertainty in the global economy, we included these triggers as a mechanism to ensure California’s fiscal solvency through this budget year. We approved budget solutions that eliminated seventy five percent of the ongoing structural deficit over time, and we have more work to do to accelerate the elimination of the remainder of that deficit.
“Ultimately, we all know that the best long-term solutions to our budget challenges are rebuilding our economy and putting Californians back to work, and we will continue working to build on the progress we’ve made with respect to job creation in the coming year.”
From state Senate Majority Leader Ellen Corbett, D-San Leandro:
“I am deeply troubled by this forecast and the prospect of making another round of deep cuts to public schools and higher education. The Legislature and governor should explore all of our available options, and do everything we can, to prevent mid-year cuts.
“The bottom line is our public schools and institutions of higher education are woefully underfunded, and we must find a way to reverse this trend of cutting their support if we are serious about providing Californians and their children with a bright future.”
From Assembly Budget Committee Vice Chairman Jim Nielsen, R-Gerber:
“The Legislative Analyst’s Office report indicates, as predicted, that the budget passed by Democrats with only a majority vote was overly optimistic and based on shaky assumptions. In this budget, state spending is predicted to increase by 12 percent by 2012-2013. It is clear that state spending has not been brought under control, and that’s not even factoring in the enormous cost of the federal healthcare mandates.
“It indicates that a lot more needs to be done to get California’s budget under control, and that does not happen through tax increases. Government has changed very little in how it conducts its business in the last three years.”
From state Controller John Chiang:
“Today’s news is no surprise. Our economy’s sluggish growth means a tax windfall is unlikely, and not a penny of the estimated $4 billion has been collected to date. The Governor and lawmakers were smart to backstop their hopeful budget projections with mid-year cuts, but they may not have gone far enough. Today’s report tracks with the troublesome pattern we have seen in the State’s receipts and spending, which could mean a cash-flow problem in California’s near future.”
From state Senate President Pro Tem Darrell Steinberg, D-Sacramento:
“Today’s numbers make it clear that the state’s first priority must be to get to the ballot in November and raise needed revenues to avoid any more damage to Californians. The notion of cutting deeper into education, public safety and services for those in need is unthinkable. I imagine an overwhelming majority of Californians agree.
“We’ve cut to the point that the results are being felt like never before. The cupboard of easy solutions is bare. Just ask the students in our higher education systems; the more than one million elderly, blind, or disabled living in poverty; the families who see their kids go to school where the classrooms are more crowded and the resources are dwindling. We’ve hit a crossroads where the time has come to turn things around.
“Democrats have tackled more than half of the reoccurring deficit problem we’ve been plagued with ever since Governor Schwarzenegger cut the Vehicle Licensing Fee. As the LAO points out, last year’s budget actions have put our ongoing deficits at the lowest we’ve seen since the recession began. By building on that foundation, new revenue will finally allow the state to recover and reinvest.”
Read more, after the jump…
From state Sen. Mark Leno, D-San Francisco:
“Last year at this time California was facing a $27.6 billion budget deficit. In one year we have decreased that deficit by more than half, but we unfortunately did so with great sacrifice by cutting billions of dollars in funding for schools and universities, health care and social services that assist elderly Californians, disabled people and lower and middle class families. In this sluggish global economy, we must continue to tackle the state’s crisis with thoughtful solutions. While the fiscal outlook tells us that additional cuts are unavoidable, we can’t continue to maintain important investments in our future with one hand tied behind our backs. Revenue, not just cuts, must be a part of the equation if we are serious about creating new jobs and rebuilding California’s prosperity. Continuing to give away billions in tax breaks to large corporations that then turn around and create jobs out of state at the expense of our colleges and universities is a formula for disaster.”
From state Senate Republican Leader Bob Dutton, R-Rancho Cucamonga:
“As Senate Republicans pointed out earlier this year, the Democrats’ ‘Hope without Change’ budget was built on false assumptions and gimmicks.
“It’s unfortunate that our prediction in July that there would be a $13 billion shortfall was right on target.
“Anyone could have predicted that it would take Legislative Democrats less than five minutes to say they plan to sidestep the trigger cuts they voted for and raise taxes instead.
“Clearly Democrats are choosing to ignore the robust tax revenue growth forecast by the Legislative Analyst, as well as the fact that the budget gap is the result of new spending growth, one-time gimmicks and prior budget debts coming due.
“It’s time to stop the majority-vote trickery and craft a real bipartisan solution.”