California budget faces new $8-billion shortfall
Plummeting revenue has already put the new state budget package out of balance, the Legislature's chief budget analyst says.
Reporting from Sacramento — The state budget package that Gov. Arnold Schwarzenegger signed last month to fill California's giant budget hole has already fallen out of balance, with plummeting revenue creating a new shortfall of $8 billion in just the few weeks since the spending plan was passed, the Legislature's chief budget analyst said in a report this morning.
"The state's economic and revenue outlook continues to deteriorate," wrote Legislative Analyst Mac Taylor. "There have been a series of negative developments."
Taylor said lawmakers and the governor would now "need to agree to billions of dollars of additional budgetary solutions to rebalance the 2009-2010 budget."
The news is not welcome at the Capitol, where lawmakers were deadlocked for months before finally agreeing to a spending plan that includes tens of billions of dollars in new taxes on sales, vehicles and personal income, as well as deep cuts in numerous government programs. Voter approval is still needed for some of the measures in the package.
Taylor said the latest revenue declines were fueled by rapidly rising unemployment and lower-than-expected economic growth. Analysts are now predicting that the state's recovery will take longer than they had anticipated, he wrote.
In addition to the new $8-billion budget gap, Taylor reported a grim outlook for future years. He warned that the state faces a shortfall of at least $12 billion in fiscal 2010-2011. The next year, the projected budget gap is more than $20 billion.
evan.halper@latimes.com
