California budget deficit may be worse than projected, report says
SACRAMENTO -- California's projected budget deficit could be worse than first estimated, according to the Legislative Analyst's Office report out Tuesday.
The revised budget shortage came in at an estimated $73 billion, which is $15 billion more than was previously projected. The number is nearly double the $38 billion shortfall Governor Gavin Newsom estimated. The LAO report recommends the California Legislature start by reviewing whether "recent augmentations for one-time and temporary spending could be pulled back or reduced."
The legislature is tasked with weighing options for possible solutions, including increasing revenues and spending reductions, and likely, then choosing a mix of solutions.
"Seventy-three billion, historically big number. That is important to understand, that is not a small number, that is a big number," said CBS13 political analyst Gary Dietrich.
Education, health and human services, transportation, environmental programs, housing and homelessness -- all areas listed by the LAO report that could see potential cuts.
"Everything is on the table. They listed all the major areas of the state budget," Dietrich said.
"From now through April, more than $51 billion in income and corporate tax receipts are forecast to come in. No one can say today with certainty how those numbers may change the budget estimate of a $38 billion shortfall. A responsible step would be for the Legislature to act now on the early action budget measures needed for $8 billion in solutions to help close this gap."
-Deputy Director of the CA Department of Finance
CBS13 asked the Department of Finance why there were inconsistencies in the projected budget deficit. A spokesperson for the department said there are three factors: the timing of when estimates are made, differences between revenue forecasts and different interpretations of state spending.
"It's almost developing like the never-ending story. We started this by recognizing an impending problem back in the spring of last year, and things have deteriorated since," said Sen. Roger Niello, R-Fair Oaks, "part of what makes it seem confusing is that you never really know what the real revenue number is, and obviously everything depends upon that cause that determines what you can spend."
A revised budget will be presented in May.
