California Revenues Continue to Fall - Deficit Could Swell Back to Over $14 Billion by End of 2008-09

[courtesy of California Progress Report]

Governor Will Release Budget Changes on May 14th
Advocates Fear More Cuts Likely - Pressure Rises to Increase Revenues

By Marty D. Omoto
Director/Organizer
California Disability Community Action Network

With the Governor's Department of Finance releasing latest financial figures showing that state revenues are continuing to fall hundreds of millions of dollars below projections, legislative budget analysts and advocates now fear that the budget shortfall will swell to over $14 billion for the State budget year that begins July 1, 2008 and ends June 30, 2009.

The bad news comes just two months after the Legislature approved several of the emergency budget proposals by the Governor, that slashed over $7 billion in spending and made other budget changes including borrowing and delays in payments, that brought down the deficit to over $8 billion.

The Governor's Department of Finance, the agency that reviews and puts together the Governor's proposed budget, released monthly financial information for April 2008 that shows year to date State general fund revenues are $1.184 billion below the budgeted revenues of $67.774 billion. For March 2008 alone, preliminary general fund revenues were estimated to be $912 million below what was forecasted in the Governor's 2008-2009 proposed State Budget.

Barring a huge unexpected surge in revenues, state officials hold little hope that the financial picture will improve, even though April is the biggest tax collecting month of the year.

Budget Crisis Impact on People with Disabilities, Mental Health Needs, Seniors & Others

The news of the growing budget deficit has also increased the anxieties of disability, senior and mental health advocates across the State who fear more massive cuts to critical services and programs.

The growing deficit also means bad news to hundreds of bills that are waiting final action both the Senate and Assembly Appropriations Committee with the likelihood that most bills now that will cost state funding or create new mandates will be killed.

“In light of our current budget predicament, it will be extremely difficult to justify any additional spending,” said Sen. Tom Torlakson (Democrat - Antioch, 7th District), chair of the Senate Appropriations Committee.