Latest analysis of California budget paints mixed picture

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The state’s top budget analyst issued a mixed report on Monday, saying California is grinding through a difficult economic recovery and cautioning that tax revenue may remain low.

The report, issued by the Legislative Analyst’s Office, pointed to some positive signs, such as increasing retail and auto sales. But, even though the state is adding jobs, the unemployment rate remains “stubbornly high,” the report said. It was 11.1% in December, higher than almost every other state.

The Legislative Analyst’s Office also expects less tax revenue than Gov. Jerry Brown’s administration has predicted. The administration has said the state will collect $184 billion in the current and upcoming fiscal years combined; the analyst’s office said the final total will probably by $6.5 billion lower.

“Lower revenues make it more difficult for the state to balance its budget in any given fiscal year,” the report said, suggesting more spending cuts may be necessary in the coming year.

The Legislative Analyst’s Office issues periodic reports on the state’s financial situation to guide lawmakers as they make budget and policy decisions.

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-- Chris Megerian in Sacramento

Twitter: @chrismegerian