Publication: San Francisco Chronicle
A quicker economic rebound than anticipated has softened California’s budget woes and will bring the state an estimated $26 billion windfall by the next fiscal year, the Legislative Analyst’s Office reported Wednesday.
But the one-time cushion is not enough to offset the severe financial losses of the coronavirus pandemic. The nonpartisan legislative analyst’s fiscal outlook warned that a projected multibillion-dollar operating deficit would more than triple over the next four years as rising costs outstrip the growth in tax revenue.
By 2024-25, California will face a budget gap of about $17.5 billion. Legislative Analyst Gabriel Petek said policymakers should start considering solutions to the problem, which may require either spending cuts or new taxes, while there is time.
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Assemblyman Phil Ting, the San Francisco Democrat who chairs the Assembly Budget Committee, stressed the need for another round of financial aid from Congress, where negotiations for a relief package broke down last month.
“We cannot take our eye off the ball,” Ting said in a statement. “The improved fiscal outlook gives us a little breathing room, but we still need help from the federal government.”