LAO: State Revenue Will Be $2.5B Higher Than Brown’s Projections
California's income will be $2.5 billion higher than predicted in Gov. Jerry Brown's (D) recently released revised fiscal year 2014-2015 budget proposal, according to projections by the state Legislative Analyst's Office, the Los Angeles Times reports (Willon/McGreevy, Los Angeles Times, 5/16).
On Tuesday, Brown released his revised budget, which includes more than $2 billion in additional spending over his initial budget proposal.
The revised plan includes $1.2 billion in additional funding for Medi-Cal compared with the January budget plan, as well as higher spending on:
- Additional contributions to CalPERS;
- Additional staffing for the state's unemployment insurance program;
- Early childhood education;
- Emergency drought assistance; and
Increasing In-Home Supportive Services' caseloads.
The state Legislature is required to advance a budget plan by June 15. Once the governor signs a plan passed by the Legislature, the new budget will go into effect on July 1 (California Healthline, 5/13).
Details of LAO Estimates
According to LAO, the state will bring in higher tax revenue than the administration predicts because of:
- The strong stock market; and
- Increasing property values.
However, LAO Analyst Mac Taylor in the report warned that state law will require the majority of that additional revenue will go toward education, leaving "no more than several hundred million dollars" for other initiatives.
Despite differences in revenue estimates, Taylor called Brown's revised budget "a bold proposal" and "an appropriate one."
LAO's predictions could lead state lawmakers to push to reallocate funding for social programs that were cut during the recession, such as mental health care, according to the Times.
State Senate Budget Committee Chair Mark Leno (D-San Francisco) said the LAO projection "certainly adds to [lawmakers'] conversation with the governor."
However, Senate Republican leader Robert Huff (Diamond Bar) said, "It will be a big mistake by the Democrats if we end up talking about cuts and taxes again so soon after getting another revenue windfall" (Los Angeles Times, 5/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.