New voter-approved measures blow $1-billion hole in state budget
Measures passed by California voters last week will cost the state up to $1 billion per year. That is according to an economic forecast conducted by the nonpartisan state legislative analyst's office.
Last week, voters approved Proposition 22, which limits the state's ability to borrow money from local governments. They also approved Proposition 26, which makes it harder to raise fees and rolls back fees that were passed by less than a two-thirds vote this year.
When fully phased in, these two measures will cost the state about $1 billion annually, the report states.
"The ongoing effect of Propositions 22 and 26 — approaching $1 billion or more annually — does not hit the General Fund until 2012–13 in our forecast," the report states.
The analyst's report predicts a $6-billion deficit in the current budget year and "a $19-billion gap between projected revenues and spending in 2011–12."
You can read the full report here.
--Anthony York in Sacramento