Tuesday, November 11, 2008

California Deficit Now $27.8 Billion

Finally, the truth. The California Legislative Analysts Office just discovered what EN readers have known since May. California is screwed. Excerpt:
State Faces $27.8 Billion Shortfall. We concur with the administration’s assessment that the state’s struggling economy signals a major reduction in expected revenues. Combined with rising state expenses, we project that the state will need $27.8 billion in budget solutions over the next 20 months.

Long–Term Outlook Similarly Bleak. The state’s revenue collapse is so dramatic and the underlying economic factors are so weak that we forecast huge budget shortfalls through 2013–14 absent corrective action. From 2010–11 through 2013–14, we project annual shortfalls that are consistently in the range of $22 billion, as shown below.

HTML Overview
September revenue data, for example, revealed a major shortfall in estimated payments for both the personal income tax (–10 percent) and corporate tax (–22 percent). The weakness in estimated payments, along with a $200 million shortfall in September sales and use tax receipts, resulted in revenues from the “Big 3” taxes falling almost $1 billion short of budget estimates for the month.

$28.7 billion is $800 per person. There just isn't any more money to grab and unemployment will be solidly over 8% by the end of the year.


Mr. Outspoken said...

First AIG, then California, can the US in general be far behind?

Rob Dawg said...

Wait until Friday when hedge fund redemptions close out. If you want to lock in losses that's the deadline. That alone will crush business and personal income tax revenues for the State.

Bakersfield Bubble said...

Friday is the CA unemployment #..8.2% is my guess.

Rob Dawg said...

I'll take the under @ 8.1% ;-)

Lost Cause said...

LAO (Laughing my Ass Off).