For the first time since the dot-com boom, California’s independent Legislative Analyst’s Office predicts huge cash surpluses (in the multi-billions) over the next few fiscal years.
As an unofficial start to the upcoming years budget cycle, the Analyst’s Office report on California’s fiscal outlook predicts the amount of money that Gov. Jerry Brown will announce as the state budget.
The office predicts that Gov. Brown will have a general fund operating surplus of $2.4 billion in 2014 and $3.2 billion in 2015.
Analyst Mac Taylor said the good projections are because of Proposition 30 last year, which increased sales taxes and personal income taxes on the wealthy, and the improving economy.
According to Mr. Taylor:
“We finally have an economic recovery – the best way to grow yourself out of problems. We had [tax measure] Proposition 30, which has obviously provided relief and revenues.”
“All of the efforts the legislature took during the bad years, of slowing the growth in many programs, and in some cases taking reductions in programs.”
Assembly Speaker John Pérez, D-Los Angeles, said the projections come following tight fiscal restraint:
“While the surpluses and increased revenue projections are welcome after so many years of recession and deficit, our job now is to maintain the fiscal prudence that put us in this favorable position, while at the same time making smart use of one-time money and stronger revenues to reinvest in California families.”
Assemblywoman Nancy Skinner, D-Berkeley, said that it’s vital to be smart and prudent to avoid bust cycles:
“We have many families still affected by the housing crisis, seniors with economic insecurity and folks without jobs. While forecasts are good, we still have to be smart and prudent to avoid bust cycles – but it’s wonderful after years of difficult economic decisions that we are in a position to reinvest in California.”