Good News and Bad News

The Legislative Analyst’s Office (LAO) has issued a report on the state budget outlook. The good news is above.  Adding in the effects of Prop 30 (and 39), in the out-years the state begins to run surpluses as shown by the rising positive bars on the right side of the chart above.  Lots of uncertainty, of course, about what might happen to the underlying economy.  It is likely that the governor will be making statements, given the report, about the need for caution.
And there is bad news also seen on the chart above on the left side or the table below.  There is a deficit projected – absent some policy changes – for 2013-14.  So in the short term – the time frame for which the governor has been promising a “balanced” budget – there is not likely to be a shower of money on UC.  Listen to the audio on our prior post or read the summary there to get a sense of the governor’s attitude.
(The reserve shown on the top chart has a fixed extra margin added to it compared to the “fund balance” above.)
The report itself is at: