State Budget
If lawmakers and Gov. Arnold Schwarz-enegger can hold the state general fund spending increase to 4.2%, California’s budget for the coming year will be balanced without increasing taxes or more borrowing.
This statement is based on the Legislative Analyst’s Office fiscal outlook data released Nov. 17. The analyst’s office projects general fund revenues and transfers for 2005-06 will be $83.8 billion. For 2004-05, general fund expenditures are estimated to be $79.5 billion. An increase of $3.4 billion, or 4.2%, would bring the spending level to $82.9 billion.
The analyst’s office projects growth in the U.S. Consumer Price Index of 2.1% and population growth of less than 2%.
Thus, a 4.2% spending increase is certainly in the ballpark with growth in population and inflation. If the governor and Legislature can agree on 2005-06 general fund spending of about $83 billion, the budget is balanced.
Larry McCarthy
President
Cal-Tax
Sacramento
