SACRAMENTO (AP) — California’s economy is expanding and voters just approved billions of dollars in tax increases. Yet Gov. Jerry Brown is projecting that the state will have a budget deficit for the first time in four years if lawmakers don’t agree to cut spending.
So what’s going on?
California’s revenue is still growing, but the money is coming in more slowly than forecasters had predicted after years of rapid increases from a hard-charging economy.
Brown expects revenue to be up 3 percent in the next budget year, but the current state spending plan was built on an assumption that it would be up even more. Costs are higher than expected, too.
Brown’s administration says personal income taxes, sales taxes and corporate taxes are all coming in below projections.