|Maybe not so fast|
An earlier post on this blog described the recent Legislative Analyst’s Office (LAO) report that projected that, with a combination of continued economic growth and Prop 30 revenues while they are in effect, California’s “structural” deficit had ended. We also noted that included in the LAO projections was what me termed an ungenerous assumption about spending on UC. We have also been posting excerpts from Regents meetings in which the governor and Speaker Pérez have also made ungenerous remarks. [Pérez, however, is now in the race for state controller and indicated that a transition to a new speaker should take place before his assembly term ends.] The LAO projected ongoing budget surpluses for years to come which has legislative Democrats planning spending increases. The TV news clip below gives you the flavor. And UC is mentioned – by Pérez – as a place to spend added monies.
Brown, however, has pictured himself at Regents meetings and elsewhere as the budgetary gatekeeper. It used to be said that the function of the chair of the Federal Reserve was to take away the punchbowl just as the party got going. Brown sees himself in such a role. So don’t plan on spending the extra funding just yet.
It might be noted that the trough of the Great Recession occurred in 2009 and we are coming on to 2014. The added years projected by the LAO assume an uninterrupted expansion continues. There are no guarantees and no forecaster would presume to be able to tell what might occur in, say, 2016 with regard to economic fluctuations. As many have noted, the state’s revenue stream is highly dependent on the personal income tax and on higher-end taxpayers, making it volatile and sensitive to the general business cycle and financial market ups and downs..