State comptroller: New billion dollar state budget deficit

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The state controller released a report today announcing a new billion dollar budget gap compared to the one passed by the California Legislature.

Local governments are already angered by the state’s grab of city money to cover the previous budget gap, so this could only deepen local cuts.

From the Los Angeles Times:

State revenue has already fallen more than $1 billion short of assumptions in the budget lawmakers passed less than three months ago, according to a new report from the state controller.

Disappointing income tax receipts are the main culprit, falling 11% below what lawmakers and Gov. Arnold Schwarzenegger expected when they agreed on a patchwork budget during the summer, halting the state’s issuance of IOUs. Sales and corporate taxes have also slid below projections.

“While there are encouraging signs that California’s economy is preparing for a comeback, the recession continues to drag state revenues down,” said Controller John Chiang in a statement. He called the new figures “a major blow to a budget that is barely 10 weeks old.”

Click here for more.

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Written by Melanie Hicken

October 9, 2009 at 4:24 pm

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