Top budget analyst skeptical of Gov. Jerry Brown's budget plan
California's chief independent budget analyst said Wednesday there's a giant "question mark" hanging over Gov. Jerry Brown's budget proposal this year -- whether voters approve higher taxes at the ballot box this November or not.
Brown's reliance on the tax initiative has increased uncertainty in an already volatile financial situation, according to the nonpartisan Legislative Analyst's Office.
"Already, California’s budget is dependent on volatile income tax payments by the state’s wealthiest individuals, and the governor proposes that these Californians pay more for the next few years," the report said. “As has become evident in recent years, differing fortunes for these upper-income taxpayers can create or eliminate billions of dollars of projected state revenues.”
Overall, Brown’s spending plan assumes a much smaller deficit than last year -- $9.2 billion instead of $26 billion -- and he proposes increasing general fund spending to $94.25 billion from $85.94 billion.
That plan, however, is largely dependent on voters approving a temporary increase in the sales tax and a higher levy on wealthy residents. If residents vote down the ballot initiative in November, Brown said he would be forced to cut $4.8 billion from public schools, as well as stripping funds from courts, firefighters and lifeguards at state beaches.
"Though the governor’s tax initiative would improve the financial outlook of public education over the next several years, his trigger plan would create significant uncertainty for schools, community colleges, and universities in 2012-13," the report said.
That means, the report said, schools may be forced to plan for the tax initiative's failure and many cuts officials were hoping to avoid will be made regardless.
Brown plans to close the rest of the budget gap with cuts to health programs, social services and other departments.
On Monday, the Legislative Analyst's Office threw cold water on Brown's tax initiative, saying it would generate $4.8 billion in the upcoming budget year, well short of the $6.9 billion the governor wants.
"If our current revenue estimates are closer to the target than the administration’s, the Legislature will have to pursue billions of dollars more in budget-balancing solutions," according to the report released Wednesday.
The governor’s proposal still needs to be debated by the Legislature, and Brown’s administration will release an updated version in May. The deadline to have a budget passed by lawmakers and signed by the governor is June 30.
"In 2011, the Legislature and the governor took significant steps — through ongoing budgetary actions — to begin to restore the state budget to balance," the report said. "To finish this job, the Legislature still faces a very difficult task for 2012, as the governor’s proposal shows."
-- Chris Megerian in Sacramento
Photo: Legislative Analyst Mac Taylor at a news conference last year. Credit: Rich Pedroncelli / Associated Press