LAO Responds to Governor’s Budget
Largely Agrees with Choices
Living up to their usual high standards, the Legislative Analyst’s Office has released their overview of the Governor’s budget proposal. They note the $5.9 billion of increased revenue over a three-year period, which in turn raises school funding by about $4.3 billion over the same period, and they urge the Legislature to begin planning for the next recession by prioritizing reserves and one-time spending.
The LAO report notes that both state reserve funds together would total $10.2 billion by the end of 2016-17 under the Governor’s plan, which they find “appropriate.” They also think that “the Governor’s focus on infrastructure makes sense,” but they also urge the Legislature to exercise their discretion over which projects are funded.
The report also presents options for the Legislature to consider when spending about $7 billion in discretionary resources. As reported, the Governor’s plan would dedicate $3.1 billion to reserves, $2.3 billion on state buildings, deferred maintenance, and county jails, and about $600 million in ongoing commitments, including employee compensation, higher education, courts, and SSI/SSP and DDS increases.
Finally, as noted in an LAO blog post, the Governor’s office and the Legislative Analyst largely agree on how much revenue the state should expect for the first time in several years. The dispute has been at the center of negotiations for the past few budget cycles, with the Governor acting as a restraining force. Both sides will update their estimates after tax season, so the agreement might be short-lived.