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Note that spending is up over 6% in nominal dollars this year but a little over 3% next year (the linear year). Figure about 2% inflation and around 1% population growth. So this year, on a per capita basis, real spending is up about 3%. Next year, it would hardly rise at all. Not clear that is a realistic projection of what is likely to happen. Will the legislature be willing just to accumulate $5 billion in the "bank"? The governor likes to restrict spending but there still was a significant rise this year. Will he, as an increasingly lame duck, hold to a no-new-spending budget?
The LAO's report is at http://lao.ca.gov/reports/2016/3507/Fiscal-outlook-111616.pdf