LAO

Capitol Alert
By Jim Miller
jmiller@sacbee.com
November 18, 2015

  • Legislature’s fiscal analyst assumes continuing economic growth
  • Projected revenue through June 2016 about $3.5 billion more than budget projection
  • Gov. Jerry Brown will present proposed 2016-17 spending plan in January

California’s economic engine will continue to hum in the coming years, allowing the state to ring up a series of multibillion-dollar budget surpluses and build rainy-day reserves, the Legislature’s nonpartisan fiscal analyst projected Wednesday.

The upbeat assessment of state finances by the Legislative Analyst’s Office moves the state further beyond the up-and-down budgets of the 1990s and 2000s and the deep recession-era shortfalls of several years ago. The projections, though, could complicate efforts by multiple trade organizations, unions and other interests to qualify November 2016 ballot measures that impose billions of dollars in new taxes.

Doctors and the largest health care workers union have been cleared to collect signatures to qualify a measure to raise tobacco taxes. Two other proposals would continue versions of the Proposition 30 income tax increases passed three years ago to pay for school and health care programs. And various nonprofits have started circulating petitions to qualify a measure imposing a tax surcharge on multimillion-dollar properties to pay for anti-poverty efforts.

Bill Carrick, a consultant working with the nonprofit coalition, said the estimated 2 million children living in poverty in California show the need for more money. He did not think the improved state budget numbers would have an effect on the proposal, which would raise an estimated $7.7 billion.

“We need to focus directly on poverty itself, and bring to bear resources on that, and turn away a deteriorating reality for too many California families,” Carrick said.

At the Capitol, the higher revenue projections could complicate efforts by legislative Democrats and Gov. Jerry Brown to get necessary Republican votes for a revised tax on health plans to help pay for Medi-Cal. The tax is the focus of a legislative special session on health care.

“Even in the absence of Proposition 30 taxes, this strong revenue growth shows that it won’t be necessary to impose new taxes on California families,” Senate GOP Leader Jean Fuller, R-Bakersfield, said in a statement.

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