LAO Revenue Forecast Close to Gov. Brown's Latest Estimates


On Tuesday, the Legislative Analyst's Office announced that its revenue projections for the state are similar to estimates in Gov. Jerry Brown's (D) revised fiscal year 2012-2013 budget plan, the Sacramento Bee's "Capitol Alert" reports (Yamamura, "Capitol Alert," Sacramento Bee, 5/15).

Details of Revised Budget Plan

Brown's $91.4 billion revised budget plan calls for cutting:

  • $946.2 million from CalWORKs -- the state's welfare-to-work program -- by limiting the amount of time most adults could be on the program from four years to two years;
  • $1.2 billion from Medi-Cal -- California's Medicaid program -- by merging services for beneficiaries eligible for both Medi-Cal and Medicare and reducing payments to hospitals and nursing homes;
  • $225 million from In-Home Supportive Services -- which provides services for the elderly and people who are blind or have disabilities -- by eliminating domestic assistance for beneficiaries in shared living environments and reducing worker payments by 7%; and
  • $64 million from Healthy Families, California's Children's Health Insurance Program, by moving children out of the program.

In addition, the revised budget plan calls for transitioning most state employees to a four-day, 38-hour workweek.

The revised budget plan relies on revenue from a compromise tax hike initiative that Brown is trying to qualify for the November ballot. The budget plan assumes $8.5 billion in new revenue from the tax hike (California Healthline, 5/15).

LAO Estimates

In February, LAO released a budget forecast estimating that California's revenue would fall $6.5 billion short of what Brown projected in his initial FY 2012-2013 budget plan released in January (California Healthline, 2/28).

Considering Brown's latest estimates, LAO said its own forecasts "now are fairly similar to the administration's in both 2011-2012 and 2012-2013, with just a few hundred million dollars of bottom-line differences each year."

Jason Sisney -- an LAO analyst -- did not say whether the agency's estimates are higher or lower than Brown's. He noted that the estimates are "fairly close, and in the revenue forecasting world, fairly close means a great deal" ("Capitol Alert," Sacramento Bee, 5/15).

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