LAO Projects Huge Budget Deficits Through 2014

The California Legislative Analyst’s Office (LAO), the nonpartisan fiscal and policy adviser, projects that the state will need $27.8 billion in budget solutions for the current fiscal year through 2009-2010. In fact, the state’s revenue picture is so bleak and the underlying economic factors, such as the housing crisis and credit crunch, are so weak that the LAO forecasts huge budget deficits through fiscal year 2013-2014 unless a major solution can be found. From 2010-2011 through 2013-2014, the LAO projects annual shortfalls that are consistently in the range of $22 billion. Closing a projected $28 billion budget shortfall will be a monumental task. The full report is available online on the LAO website.