- Associated Press - Friday, May 20, 2016

SACRAMENTO, Calif. (AP) - California’s nonpartisan legislative analyst said Friday that he expects budget surpluses in each of the next four fiscal years, rejecting Gov. Jerry Brown’s projection of a budget deficit if voters don’t renew temporary tax increases on the rich.

The Democratic governor last week projected deficits in three of the next four budget years that would reach $1.7 billion in 2018-19 and $4 billion the next year, when the Proposition 30 tax hikes fully expire.

While he refused to take a position on extending the taxes, a question voters are likely to decide in November, Brown warned that budget cuts would be inevitable if they lapse.

Legislative Analyst Mac Taylor’s contradictory analysis projects surpluses of $3.8 billion in 2018-19 and $1.8 billion the following year. Both projections assume there is no recession.

Taylor’s more optimistic projections are based on estimates of both higher revenue and lower costs than the governor’s Department of Finance forecast. His anticipated costs for social service programs are $4 billion less than Brown’s in 2019-20.

Proposition 30 raised tax rates for incomes above $250,000 by one to three percentage points through 2019. Supporters said last week that they’re turning in nearly 1 million signatures in support of asking voters in November to retain the income tax hikes for an additional 12 years.

A temporary quarter-cent sales tax increase would expire as scheduled at the end of this year.

The legislative analyst did reduce his surplus projections compared with earlier reports after the state committed to significantly more spending in future years. Lawmakers raised the minimum wage to $15 an hour, which is expected to cost the state $3.6 billion a year once fully implemented. Employee compensation costs are also expected to rise after corrections officers won concessions that are likely to be matched for other union bargaining groups.


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