LAT: Cash Surge Fills State's Budget Gap (California)

[DeepModem Mom]

Cash Surge Fills State's Budget Gap
Robust tax revenue may wipe out a huge shortfall expected next year, the legislative analyst reports. But 2007 is another story.
By Evan Halper, Times Staff Writer


SACRAMENTO — In an unexpected election-year gift for Gov. Arnold Schwarzenegger, California coffers are suddenly flush with enough cash to wipe out what was projected to be a multibillion-dollar gap in next year's state budget.

Nonpartisan Legislative Analyst Elizabeth G. Hill reported Wednesday that, largely because of robust economic growth, tax receipts were far exceeding forecasts. At the current rate, the state is heading toward ending the fiscal year in June with a budget reserve of $5.2 billion — four times what was anticipated when the governor signed the budget over the summer.

Hill, whom lawmakers of both parties look to for guidance on the budget, said that was enough extra cash to eliminate the shortfall that had been projected for next year if spending remained at current levels. It would be the first time in five years that lawmakers would not have a multibillion-dollar hole to fill.

Politically, that means less pressure on the governor to propose program reductions or to break his pledge not to raise taxes when he unveils his annual budget plan in January. It also takes away opportunities for his opponents to back him into a corner on those issues when the state nears its summer deadline for passing a budget — and the 2006 race for governor heats up....

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Higher than expected corporate profits are leading to a large chunk of the extra cash flowing into state coffers — and much of that is attributed to the record oil company profits of late. Those business profits helped generate an increase in corporate tax receipts and, because of the capital gains they produced, also delivered a boost in personal income tax receipts....


http://www.latimes.com/news/local/la-me-budget17nov17,0,1764840.story?coll=la-home-headlines

[orwell]

1. Finally some...

good news on the CA budget.

[goclark]

2. Great but Arnold deserves NO credit

Watch how fast he will take all the sunshine.

[David__77]

3. Interestingly, this is NOT good news for Der Gropenfuhrer.

He cannot claim that California cannot afford meeting the challenges of providing better education and health care for children, that business cannot afford to pay a higher minimum wage. The only way he can save himself, maybe, is by veering to the left of center, signing some pro-worker legislation and breaking with his "Wall Street populism" that was rejected by my fellow Californians last week.

[neuvocat]

4. Very unlikely.

There hasn't been an influx of money at all, especially from corporate profits. This is just right-wing fluff trying to justify Trickle-Down economics (proven by the Reagan/Bush Administration to be nothing more than rhetoric to cheat taxpayers out of their money) as well as a bitter defeat for Arnold Swarzenegger.

[yorkiemommie1]

5. oh, goody!

then it won't be long before our schools get their money back!!

... right?....