No, really. That's not from a fake Twitter feed or anything.
Here's the report, released today by the Legislative Analyst's Office. The LAO says there is actually light at the end of the budget tunnel, and this time it's not an oncoming train. The highlights:
- 2013-14 projected deficit at $1.9 billion (Last year's November projection pegged the deficit at $12.8 billion)
- A word you probably thought was stricken from California dictionaries: "Surpluses." From the LAO: "Beyond 2013–14, we therefore project growing operating surpluses through 2017–18--the end of our forecast period. Our projections show that there could be an over $1 billion operating surplus in 2014–15, growing thereafter to an over $9 billion surplus in 2017–18."
Here's the story via the LAO's Executive Summary:
Budget Situation Has Improved Sharply.
The state’s economic recovery, prior budget cuts, and the additional, temporary taxes provided by Proposition 30 have combined to bring California to a promising moment: the possible end of a decade of acute state budget challenges. Our economic and budgetary forecast indicates that California’s leaders face a dramatically smaller budget problem in 2013–14 compared to recent years. Furthermore, assuming steady economic growth and restraint in augmenting current program funding levels, there is a strong possibility of multibillion–dollar operating surpluses within a few years.
Here's the forecast...
Projected $1.9 Billion Budget Problem to Be Addressed by June 2013.
The 2012–13 budget assumed a year–end reserve of $948 million. Our forecast now projects the General Fund ending 2012–13 with a $943 million deficit, due to the net impact of (1) $625 million of lower revenues in 2011–12 and 2012–13 combined, (2) $2.7 billion in higher expenditures (including $1.8 billion in lower–than–budgeted savings related to the dissolution of redevelopment agencies), and (3) an assumed $1.4 billion positive adjustment in the 2010–11 ending budgetary fund balance.
We also expect that the state faces a $936 million operating deficit under current policies in 2013–14. These estimates mean that the new Legislature and the Governor will need to address a $1.9 billion budget problem in order to pass a balanced budget by June 2013 for the next fiscal year.
Surpluses Projected Over the Next Few Years.
Based on current law and our economic forecast, expenditures are projected to grow less rapidly than revenues. Beyond 2013–14, we therefore project growing operating surpluses through 2017–18—the end of our forecast period. Our projections show that there could be an over $1 billion operating surplus in 2014–15, growing thereafter to an over $9 billion surplus in 2017–18. This outlook differs dramatically from the severe operating deficits we have forecast in November Fiscal Outlook reports over the past decade.
Sacramento-beat journalists have been tweeting about the report...