The nonparitsan Legislative Analyst’s Office released a report last week which paints a very gloomy picture for California’s finances. Elizabeth Hill, the head of that office, is quoted in the Orange County Register, as saying, “We face a very challenging budget situation…we are urging that decision makers act now and not wait until the May revision.”
What’s the problem? Slumping tax revenues. The weak housing market could change Governor Schwarzenegger’s projected $2.1 billion surplus into a $726 million deficit.
However, neither the Governor nor legislative leaders seem in a hurry to change their rosy forecasts. Republican and Democrat leaders all say ‘let’s wait and see.’ In any case, the LAO’s analysis serves as a wake-up call to all that the Golden State could become the Bronze State later this Spring.