Governor's Statement on LAO Report

Governor Edmund G. Brown Jr. released the following statement in response to today's report on the budget from the Legislative Analyst's Office:

“The Legislative Analyst's Office report underscores the fundamental uncertainty of our time and, therefore, the financial imperative to be prudent, make the tough cuts now and give the voters a choice on additional revenues.”


The following is the California Fiscal Outlook 2012-2013 from the LAO:

We forecast that General Fund revenues and transfers in 2011-12 will be $3.7 billion below the level assumed in the June budget package. Such a shortfall could result in $2 billion of “trigger cuts” to various programs—including all of the “Tier 1” trigger cuts and three-fourths of the “Tier 2” cuts. (The Director of Finance will determine the actual amount of such cuts next month.) In 2011-12, we project that the state will have a $3 billion deficit, including the effects of these trigger cuts. In 2012-13, the state will face higher costs due to expiration of a number of temporary budget measures, an increase in Proposition 98 school costs under current law, the repayment of its Proposition 1A property tax loan, and other factors. We project a $10 billion operating shortfall (the difference between annual revenues and expenditures) in 2012-13. The $3 billion “carry-in” deficit from 2011-12 and the projected $10 billion operating shortfall mean that the Legislature and the Governor will need to address a $13 billion budget problem between now and the time that the state adopts a 2012-13 budget plan.