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California faces $13B deficit, midyear cuts

SACRAMENTO — California faces $2 billion in automatic spending cuts at the first of the year that will reduce funding for public schools, higher education and a range of state services, according to a nonpartisan fiscal analysis released Wednesday.

The bleak assessment by the state's Legislative Analyst's Office warns of declining tax revenue and a rocky statewide economic outlook that will lead to budget shortfalls for years to come.

Democratic lawmakers and Gov. Jerry Brown had hoped for a $4 billion increase in tax revenue through the current fiscal year when they passed the state budget last summer. The analysis released Wednesday said revenue — a majority which comes from income, sales and corporate taxes — will run $3.7 billion lower than the state assumed.

Based on a pre-approved budget mechanism, that shortfall will translate into $2 billion of automatic cuts in the weeks ahead.

"Unfortunately, there are few easy options left for balancing California's budget," the legislative analyst wrote. "Difficult program reductions already have been passed, and significant one-time budget actions may be more elusive than in prior years."


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