Yes, job growth is improving and consumer confidence is building, but the Legislative Analyst's Office points to a still-high unemployment rate (only Nevada is worse) and a lousy housing market. All of which has the LAO's revenue forecast for this fiscal year and next to be $6.8 billion than what Gov. Brown is projecting. From the LAO report:
If our revenue forecast proves to be more accurate than the administration's, the Legislature and the Governor will have to identify additional budgetary solutions to bring the 2012-13 state spending plan into balance. (The net effect of our lower revenue assumptions on the near-term budget problem, however, will depend on how this updated forecast affects the Proposition 98 minimum guarantee for schools and community colleges. We expect to develop updated Proposition 98 estimates in the coming weeks.) Much more information will become available by the end of April, when a large amount of income tax payments are received by the state and refund payments are made. The Legislature will want to wait until after this data is analyzed in the May Revision process before making its 2012-13 budget decisions.
Of course, the LAO is not the final word. Some state economists are far more upbeat. But it is worth noting that tax revenues for the current fiscal year have been coming in lower than expected.