By David Siders
Published: Thursday, Nov. 21, 2013 – 10:16 pm
Last Modified: Thursday, Nov. 21, 2013 – 10:36 pm
One day after the Legislature’s fiscal analyst projected years of multibillion-dollar budget surpluses, Gov. Jerry Brown urged caution Thursday, calling on the Legislature to bolster reserves.
“It turns out, according to the legislative analyst, we have billions of dollars in surplus,” Brown said at an event in Santa Monica. “So there will be a great effort to spend it as quickly as possible.”
The Democratic governor, speaking at the Milken Institute California Summit, said the budget’s reliance on capital gains – a traditionally volatile source of revenue – makes financial peaks and valleys more pronounced.
“The question is, ‘When do we get the next valley?’” he said. “And the only way to avoid that is to put it in a rainy day fund, to say no when necessary, along with saying yes when that’s appropriate.”
The nonpartisan Legislative Analyst’s Office projected Wednesday that the state will enjoy a $5.6 billion surplus by June 2015, with annual surpluses reaching $8.3 billion by the 2016-17 budget year. The office urged lawmakers to hold much of any excess in reserve, warning that even a moderate economic downturn could knock the state back into deficit.
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