While the California budget situation has evinced little improvement since the legislature enacted a budget in June, the Governor’s Finance Director announced her end of year projections last week.
These were significantly better than the Legislative Analyst’s November estimates. Consequently, the necessary January budget cuts will be about $1 billion rather than the worse case scenario of $2 billion.
The smaller reduction amount will be focused on the state’s higher education programs rather than local K through 12 schools.
The June budget estimated revenues for the current fiscal year would be about $88.5 billion. Last month, the LAO estimated these revenues would be closer to $84.8 billion. Last week, Ana Matosantos, Gov. Jerry Brown’s director of finance, released her offices estimate of $86.2 billion.
Consequently, the total current year budget reductions will be about $981 million. While nearly 25 percent of those reductions will come from school transportation costs, $300 million will come from state higher education programs and $100 million from in- home support services.
The Finance office is estimating that state personal income tax revenue will be $1.5 billion more than expected, due to wages and salaries, not capital gains. Sales tax revenues are estimated to be slightly lower.