LAO: State Fiscal Future Steady with Savings but Full of Unknowns
November 17, 2016
The LAO’s 2017-18 Fiscal Outlook report for the state says the recent efforts to bulk up the “rainy day fund” was smart given an unpredictable forecast ahead. Without any changes, the state will end the 2017-18 fiscal year with $11.5 billion in total reserves, which reflects the most recent ballot measure outcomes from last week including the personal income tax extension.
LAO representative Carolyn Chu will be presenting the findings to the CSAC Government Finance and Administration Policy Committee at the 122nd CSAC Annual Meeting on December 1 in Riverside County (Palm Springs).
The report does warn that the state budget condition relies on many volatile and unpredictable factors. This is a structural issue with heavy reliance on capital gains and personal income tax. The potential for a mild economic recession is one additional variable. Finally, possible policy shift at the state and federal level may lie ahead and could be significant in light of recent national election results. This report and a summary infographic are available here.