State Budget Looking at $26 Billion Windfall Next Year, But Money Woes Remain
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.
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.”