Much of the report focuses on the world of Prop 98, i.e.,
K-14 schools, not surprisingly since that is such a large chunk of the budget.
The LAO is concerned about possible over-optimism in Brown’s
budget projections. Just a few days ago,
however, the Brown projections were criticized by a highly-regarded private
forecaster as too pessimistic. The
divergence underscores the point made in an earlier post on this blog on the budget:
forecasting cannot be precise.
Editorial comment: The uncertainty over budget forecasts
should give pause to various do-good groups who think our budgetary problems
would be solved by going to a two-year budget.
Note that in the current one-year regime, we have considerable
uncertainty forecasting 18 months ahead (since the budget year begins July 1,
2012 and ends June 30, 2013). The
proposed two-year regime would require a forecast 30 months ahead,
substantially raising the level of uncertainty.
Editorial prediction: It should give them pause, but it won’t.
The LAO report is at http://lao.ca.gov/reports/2012/bud/budget_overview/budget-overview-011112.pdf
Comments on the Brown budget proposal by forecaster Chris Thornberg are at http://blogs.sacbee.com/capitolalertlatest/2012/01/economist-says-jerry-browns-budget-underestimates-revenue.html
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