We’re Gonna Have a Surplus, And It’s Burnin’ A Hole In My Pocket
The California Legislative Analyst’s Office’s Chief Analyst Mac Taylor is forecasting a budget surplus that could reach $2.4 billion by June 2014 and $5.6 billion by June 2015. The actual projection made by the LAO has the state at a $10 billion surplus in six years, provided that revenue and spending patterns continue at the same pace in that time span. Ignored in this reporting is the $70 billion unfunded hole the California Public Employees Pension System has, or the unfunded mandate at the California State Teachers Retirement System.
With Governor Brown telling the Legislature that the surplus should be banked for a rainy day, and Legislative Republicans largely agreeing with the Governor, we’ve also seen numerous media opinion pages asking the Legislature to follow Brown’s suggestion to bank the surpluses and to start paying down debt before considering restoring funding to programs cut during the recession that fully engulfed the state in 2007/2008.
Also missed in this economic euphoria is the fact that the surpluses are due in large part to the tax increases implemented by Proposition 30 – which, strangely enough, has projected increases in tax revenue collected that follow the expected surpluses through 2018. So, why did we need to increase taxes?
The question for now is, since California is filthy rich with a $10BILLION budget surplus through 2018, how much of that $10 billion surplus will the Legislature spend in 2014?
(*- The correct answer is $90 billion. 2014 is, after all, an election year -*)