Budget Analyst Projects Even Higher Tax Revenue
SACRAMENTO (AP) — The state’s independent budget analyst predicted Friday that California will collect $2.5 billion more than Gov. Jerry Brown forecasts for the coming fiscal year, giving Democrats a reason to push spending.
Legislative Analyst Mac Taylor wrote in his report that the state will collect more from capital gains taxes in the coming months because of the stock market’s performance.
His office projected general fund revenue of $109.2 billion for the fiscal year that starts July 1, compared with Brown’s projection of $107 billion, for $2.2 billion more in tax revenues. But after adjusting prior revenues, the analyst predicts the state will collect $2.5 billion more than the governor’s projections.
Toni Atkins, who was installed as Assembly speaker this week, said Democrats will consider the analyst’s forecast as they develop a budget that makes what she refers to as “smart investments.” Republicans said the Legislature should be cautious about spending.
Brown’s spokesman, H.D. Palmer, said the bulk of that additional money would be temporary because it would be coming from volatile capital gains. By law, the state is required to spend much of that on schools and community colleges.
“If those revenues materialize, virtually all of it would be dedicated to education and therefore constitutionally not available for other general fund spending,” Palmer said in a statement.
Brown proposed a record general-fund spending plan of $107.8 billion on Tuesday, but he cautioned that expenditures have increased at a similar rate. He proposed the state use its surplus for higher-than-expected health care costs and start paying down the underfunded teachers’ pension system.
Taylor called Brown’s plan to pay the state’s $74 billion unfunded liability for teachers’ pensions over 30 years a “bold proposal.”
The analyst also credited Brown for paying down debt so the state is better prepared for the next economic downturn.
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