November 17, 2005

UNEXPECTED?:

Cash Surge Fills State's Budget Gap: Robust tax revenue may wipe out a huge shortfall expected next year, the legislative analyst reports. But 2007 is another story. (Evan Halper, November 17, 2005, LA Times)

In an unexpected election-year gift for Gov. Arnold Schwarzenegger, California coffers are suddenly flush with enough cash to wipe out what was projected to be a multibillion-dollar gap in next year's state budget.

Nonpartisan Legislative Analyst Elizabeth G. Hill reported Wednesday that, largely because of robust economic growth, tax receipts were far exceeding forecasts. At the current rate, the state is heading toward ending the fiscal year in June with a budget reserve of $5.2 billion — four times what was anticipated when the governor signed the budget over the summer.

Hill, whom lawmakers of both parties look to for guidance on the budget, said that was enough extra cash to eliminate the shortfall that had been projected for next year if spending remained at current levels. It would be the first time in five years that lawmakers would not have a multibillion-dollar hole to fill.

Politically, that means less pressure on the governor to propose program reductions or to break his pledge not to raise taxes when he unveils his annual budget plan in January. It also takes away opportunities for his opponents to back him into a corner on those issues when the state nears its summer deadline for passing a budget — and the 2006 race for governor heats up.


Yeah, who'd expect that a prolonged economic boom would fill the coffers?

Posted by Orrin Judd at November 17, 2005 8:08 AM
Comments

"But 2007 is another story" . . .

hope springs eternal in the liberal breast.

Posted by: Jim in Chicago at November 17, 2005 11:22 AM

Despair, Jim, despair springs eternal.

Posted by: Mikey at November 17, 2005 1:17 PM

We will ensure that the worst economy since Herbert Hoover returns by mid-2006 so that we can regain control of Congress in the '06 election. Aaarrrrryyyyyyyyyyyyyyyyyyyyyyooooooooooooooooooooooooooooooooooooooooooooooooogggggggggggggggggggggghhhhhhhhhhhhhhhhhhhhhh!

Posted by: Dr.Dean at November 17, 2005 11:03 PM
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