Source: Politico CA Playbook
THE BUZZ — COOL YOUR JETS? The report from the state Legislative Analyst’s Office predicting a $24 billion budget deficit for 2023 rattled Sacramento last month. But in a presentation Wednesday, Assembly Budget Chair Phil Ting (D-San Francisco) was optimistic when he laid out the chamber’s 2023 blueprint — saying the state will be able to protect the last decade of investments in things like education, health care and public safety even if revenues are less-than-peachy.
Ting: “This is a very different situation than the state was faced [with] in 2008 and 2009, where they were running out of cash, and that they didn't really have any options.”
The main source of confidence: budget reserves. Since the Great Recession, the state has managed to build a buffer against future downturns. The LAO says the state’s general fund reserves are roughly equivalent to the predicted deficit, about $23 billion. The Assembly, which calculates reserves differently than the LAO, estimates a total of about $37 billion, including reserves from Proposition 98, which have to be spent on education.