SACRAMENTO — The plan that Gov. Arnold Schwarzenegger and lawmakers approved last month to fill California's giant budget hole has already fallen out of balance with a projected $8-billion shortfall, the Legislature's nonpartisan budget analyst said Friday.
After analyzing recent data showing rapidly rising unemployment and lower-than-expected economic growth, Legislative Analyst Mac Taylor said the state is on track to have even less money than lawmakers anticipated in February.
State leaders said then that they had ended the financial crisis through $42 billion in lowered spending, increased taxes, borrowing and accounting shifts.
California's economy in is such bad shape that Taylor's office anticipates that residents' combined personal income will be lower this year than it was last year, leading to fewer tax dollars for state coffers.
"I went as far back as 1950, and I could not find a situation in which personal income had actually declined in the state, so that's a rather unusual event," Taylor said at a news conference Friday.
The dour projection is likely to complicate Schwarzenegger's effort to win voter approval for a package of budget-related ballot measures scheduled for a special election May 19.
The governor and legislative leaders have said the propositions -- which include controversial bids to extend the recent tax increases, borrow against future lottery proceeds and siphon money from popular programs for children and the mentally ill -- are necessary to restore the state's fiscal balance.
For opponents, the new forecast is "going to give them a tremendous argument," said Larry Gerston, professor of political science at San Jose State.
He noted that since last fall, Schwarzenegger and lawmakers have repeatedly announced that they have resolved the state's financial troubles, only to see deficits rapidly reemerge.
"Their campaign was based on a shaky foundation as far as credibility goes . . . and this isn't going to make it any better," said Jon Coupal, president of the Howard Jarvis Taxpayers Assn., which opposes the special election measures.
H.D. Palmer, a spokesman for the state Department of Finance, noted that Taylor's estimate was based on more recent data than lawmakers had in February when they crafted their rescue plan.
"We are continuing to work our way through a recession that has hit California's economy extraordinarily hard," Palmer said. "That means there is clearly a potential for the state's revenue picture to get worse."
