Posted on 11/17/2016 2:06:03 PM PST by ChicagoConservative27
In issuing its annual survey of state finances, the nonpartisan Legislative Analyst’s Office has affirmed the wisdom of Gov. Jerry Brown’s push for Proposition 2, the 2014 ballot measure that amended the California Constitution to create a sizable rainy-day fund and set aside money when revenue is free-flowing for use when it dries up.
The LAO estimates that if California’s economy continues its modest growth and new spending commitments are not made, the state will end the 2017-18 fiscal year with $11.5 billion in total reserves. Of that amount, $8.7 billion can be used only for future budget emergencies. The remaining $2.8 billion can be used for any purpose.
While the LAO’s outlook notably assumed no new changes in federal policy despite an election that suggests “some changes are now likely,” the agency reported that the state’s reserve would allow California to survive a mild recession “without cutting spending or raising taxes through 2020-21.” That’s a remarkable turnaround from the budget chaos seen in the final years of Gov. Arnold Schwarzenegger. Yet California relies so much on volatile capital gains taxes that state revenue is often akin to a roller coaster. The state took in $117 billion in fiscal 2008-09 and only $101 billion in 2009-10. A similar year to year drop would wipe out the entire reserve. And in the long term, Sacramento still doesn’t have any idea how it will cover the vast cost of unfunded retirement benefits for state employees.
Brown’s warnings to lawmakers not to consider new or expanded programs still make vital sense.
(Excerpt) Read more at sandiegouniontribune.com ...
Receipts of sales tax on beer purchased by illegals at 7-eleven is sure to plummet.
rainy day fund....call it what it is......money for pensions and jerry brown and his pals.
The government can survive a recession because it took people’s money. But the people who lose jobs are screwed. So does “California” really survive a recession?
Maybe if Californians had a brain, they would build dams and mass water storage devices.
"It never rains in California, but girl don't they warn ya. It pours, man, it pours."
This will most likely be used to subsidize LA and San Francisco to replace lost federal money withheld because of Sanctuary.
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