Might Jerry Brown be having second thoughts? The state's Legislative Analyst's Office says California is looking at a $6.1 billion shortfall in the current fiscal year and another $19 billion next year. Along with the numbers came more warnings from the LAO to avoid one-time gimmicks that just delay the day of reckoning.
"Unless plans are put in place to begin tackling the ongoing budget problem, it will continue to be difficult for the state to address fundamental public-sector goals -- such as rebuilding aging infrastructure, addressing massive retirement liabilities, maintaining service levels of high-priority government programs and improving the state's tax system," the report said.
Yet Legislative Analyst Mac Taylor says the state faces deficits of $20 billion each year through 2015. What to do? Brown wasn't pushing tax hikes during the campaign, which means he'll need to work with the Democratic-controlled Legislature on additional spending cuts. Good luck with that. From Bloomberg:
The new deficit figure comes as the state is preparing to sell about $14 billion of long- and short-term debt during the next two weeks. Standard & Poor's rates California general- obligation debt A-, its fourth-lowest investment grade and the worst rating among states. Moody's Investors Service gives it an A1, six steps above speculative grade, and Fitch Ratings also ranks California A-.
*Update: Not that it makes much difference with a deficit that large, but state receipts for the month came in $232.3 million higher than budget estimates, or 4.6 percent. Personal, corporate and sales taxes were all above estimates, according to the Controller's office.