The governor, by constitutional mandate, presented his budget proposal in a news conference today. He spoke for 57 minutes which for him was probably record brevity. But he then took questions from reporters for another 59 minutes for an almost two-hour performance. As always, there are flexible uses of words such as surplus, deficit, and balance. Rather than deal with that issue, below we have taken the governor's figures and rearranged them in a useful fashion. Various reserve accounts are linked to the general fund. When you put them all together, as the table below shows, you get a deficit for the current fiscal year (2023-24) of -$37.4 billion. Note that since we are only in early January, almost half the year remains to occur, so that number is a forecast based on information at the half-way point. In the proposal for the coming fiscal year (2024-25) beginning July 1, there is a deficit of -$8.8 billion.
Source: https://ebudget.ca.gov/FullBudgetSummary.pdf;
https://ebudget.ca.gov/2023-24/pdf/Enacted/BudgetSummary/SummaryCharts.pdf.
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Essentially, there was a big drop this year in receipts related to capital gains, causing much of this year's problems. The Dept. of Finance appears to be projecting similar receipts from capital gains next year, i.e., flat receipts. Other tax receipts are also largely flat, which suggests an economic slowdown underlying the projections. Revenues and transfers goes up mainly because the Budget Stabilization Account (BSA, "rainy day fund") is tapped.
Let's turn to the UC component of the budget. The Regents will get a report and will undoubtedly say nice things, as will the UC president.
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