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California finances still face risk despite improvement, analyst says

January 14, 2013 |  1:51 pm

Mac Taylor verticalThe Legislative Analyst's Office said Monday that Gov. Jerry Brown's budget proposal represents "a significant improvement in the state’s finances."

However, the analyst's new report says California's budget faces other threats, including the mounting costs of healthcare for retirees and pensions for teachers.

"The state faces daunting budget choices even in a much–improved fiscal environment," the report says.

Brown and the legislative analyst, who provides nonpartisan financial advice to state lawmakers, have differed on how quickly the state's financial situation is improving.

The governor, who released his budget proposal on Thursday, said the state no longer faces any budget deficits. The legislative analyst said in November that the state would still have a $1.9 billion deficit this year and wouldn't see surpluses until later.

Monday's report details where Brown's numbers are more optimistic than the legislative analyst's.

The biggest gap involves tax revenue -- the governor expects $1.1 billion more than the analyst has estimated.

Brown also says the state will save $1 billion more when it comes to dissolving defunct redevelopment agencies and implementing California's cap and trade program.

The governor, lawmakers and interest groups will be haggling over state spending for months. The governor will release a revised proposal in May, and a final budget is due at the end of June.

ALSO:

Gov. Brown unveils budget, says state is in the black

California's debt still a heavy cloud over state's future

Brown administration shifts schedule for repaying loans

-- Chris Megerian in Sacramento
twitter.com/chrismegerian

Photo: Legislative Analyst Mac Taylor discusses the state's finances in November. Credit: Rich Pedroncelli / Associated Press

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