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

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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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