Download presentation
Presentation is loading. Please wait.
Published byDenzel Tiley Modified over 10 years ago
1
LAO California’s Economic and Budget Situation Legislative Analyst’s Office
2
LAO California’s Recent Employment Woes Concentrated in High Paying Region Wage and Salary Jobs, Percent of Prerecession Peak
3
LAO …And in High Paying Sectors… Manufacturing Jobs, in Millions 1990 1 2 3 4 5 6 7 8 92000 1 2 3 1.5 1.6 1.7 1.8 1.9 2.0
4
LAO Revenues From Capital Gains and Stock Options Fell Sharply… (In Billions). 98-9999-0000-0101-0202-0303-0404-0505-06 Forecast 5 10 15 $20
5
LAO …And The State Has Yet To Resolve Resulting Imbalance General Fund (In Billions)
6
LAO 2004-05 Shortfall Facing California Before Proposition 57—$17 Billion Assumed sale of $8.6 billion statutory bond with debt service costs of $2.5 billion Absent this bond, shortfall would have been $23 billion After Proposition 57—$12 Billion New bond contributes $5 billion to solution $3.7 billion from larger bond proceeds $1.3 billion from lower debt-service
7
LAO Allocation of Governor’s Budget Solutions Program Savings—$7.3 Billion Proposition 98—$2 billion Health/Social Services—$2.5 billion Transportation—about $0.9 billion Loans/Borrowing—$2.6 Billion Local Government-Related—$1.8 Billion Transfers/Shifts/Other—$1.6 Billion
8
LAO Key Findings in LAO February Budget Review Budget Modestly Out of Balance In 2004-05 Major Budget Threats Could Increase Shortfall $7 Billion Operating Shortfall Projected For 2005-06 Reform Proposals Still Under Development
9
LAO Governor’s Plan Would Eliminate About One-Half of Ongoing Shortfall General Fund (In Billions)
10
LAO Why Structural Shortfall Reemerges in 2005-06 Expiration of One-Time Savings After 2004-05 Economic recovery bonds Pension Bonds Suspension of Proposition 42 Other Obligations in 2005-06 Transportation loan repayment Local mandates
11
LAO Update: Situation Has Not Improved State Facing Higher Costs in a Number of Areas Risks became reality Deficiencies Mid-year savings not adopted Economy/Revenue Picture Mixed California job growth still disappointing Year-to-date collections a little soft But key current indicators positive As always, April is key
12
LAO Key Budget Decisions Ahead How Much of Ongoing Problem Should Be Addressed in 2004-05? How Much Can Be Done on Expenditure Side? Should Taxes Play a Role?
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.