California Revenue Shortfall to Force Cuts
he California Legislature passed a budget last fall relying on optimistic projections of how much money the state could bring in with a growing economy. But to the surprise of few, not all of that money has materialized.
Gov. Jerry Brown said Tuesday that the state was about $2.2 billion short of its projected $88.5 billion income and that that would force hundreds of millions of dollars more in cuts to the budget, primarily to state’s colleges and universities as well as to health care. Under the budget the Democratic-controlled Legislature approved in June, if revenues are more than $1 billon short of projections, automatic reductions specified in the budget — known as trigger cuts — would go into effect.
The cuts will mean the elimination of $258 million in state financing for public school transportation and are almost certain to increase fees for college students. But the projections fell short of the doomsday predictions that some had worried about, which would have cut as many as seven days from the school year in some public schools.
“I think we are very fortunate that at least we got half the revenue,” Mr. Brown said. “So we did hope for more and we got more, but not quite as much as we wanted. The cuts are far less than they could have been. It was much wiser to assume the $4 billion, than in assuming the $4 billion in cuts.”
Last month the state Legislative Analyst’s Office projected a higher shortfall of $3.7 billion, which would have meant even deeper cuts. But state budget officials said that their projections were based on more recent state income and corporate tax receipts, which are higher than the earlier report predicted.