With potential recession looming, California estimates $25-billion deficit next year
California is spending an estimated $25-billion more than it receives in revenues in fiscal 2013, according to a governor’s report released Monday.
Some legislators have been debating for months whether California needs to raise its sales taxes and implement income taxes to help the state balance its budget.
The governor’s report is the second to come out this month, following the state Controller’s Office’s first report last week. The latest report says that California is facing a huge deficit — a major concern for all policymakers and a source of political pressure.
The budget deficit is expected to grow to more than $28.3-billion by June 30, 2013, from a projected $15.3-billion for the fiscal year finished in June, according to the controller’s estimates.
“We will continue to see the same budget gaps every year for the foreseeable future, which makes it impossible for state government and local governments to continue to deliver essential services to the people who rely on them,” said Chief Financial Officer Diane Trauss on a conference call with reporters.
The deficit for the current fiscal year is projected to be less than $7.7-billion.
“If we do nothing, we will continue to have a budget problem for years to come,” Trauss said. “We’re going to continue to try to fix the gaps in the budget while at the same time continuing to cut programs and services that people actually need.”
State government already is dealing with a $15.1-billion deficit for the fiscal year that began July 1. And that figure will grow to greater than $25.3-billion in fiscal year 2014.
The controller’s report estimates that California’s unemployment rate will continue to be above the national average, despite the strong job growth that has recently taken place. The state’s unemployment rate remains unchanged from June at 9.1 percent, which is unchanged from April’s report