The Department of Finance is projecting state budget deficits as far as the eye can see. Recently posted on the department's website, the forecasts show general fund expenditures exceeding operating revenues by almost $7.4 billion in 2010-11, $15.4 billion in 2011-12 and $15.1 billion in 2012-13.
In 2011-12, general fund revenues are scheduled to drop to $86.8 billion, down from $91.2 billion in 2010-11. In the 2012-13 fiscal year, the forecast is estimating 10 percent growth in revenues ($86.8 billion to $95.6 billion).
With respect to the current budget, the Department of Finance believes that resources will exceed expenditures by $1.58 billion. With several uncertainties associated with the July adjustments, it is not known if this number is realistic.
One piece of the July budget solution remains undone. In July, legislators punted a solution for cutting the corrections budget and used a plugged figure of $778 million in savings. So far, there has been no agreement on how to implement the projected savings. Democrats in each house have passed different plans that call for releasing thousands of criminals from the state prisons. There have been threats of a referendum if one of these plans passes. If opponents are successful in obtaining signatures to qualify a referendum for the ballot, none of the estimated savings will materialize in time to affect 2009-10 spending.
Cal-TaxReports, September 8, 2009
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