LAO Publishes Overview of Governor’s Proposed Budget

The California Legislative Analyst’s Office (LAO) recently published its overview of Governor Brown’s proposed FY 2018-19 State Budget. The overview details major proposals of the budget, including funding the rainy day reserve fund, boosting spending on schools and community colleges, and supporting new infrastructure projects.

The LAO projects that based on their current assessments, revenues in FY 2017-18 and FY 2018-19 are likely to be higher than the Administration’s estimates; however similar to the Administration, the LAO notes a level of uncertainty around the recent passage of federal tax reform and federal health related proposals.

In evaluating the Governor’s January proposal, the LAO encourages the Legislature to:

  • Consider their optimal level of targeted reserves, despite the Governor’s fiscally prudent approach of fully funding the state’s rainy day fund.
  • Delve deeper into the Administration’s calculation of Proposition 55, given this first year can be precedent setting and can determine the likelihood of a supplemental appropriation to Medi-Cal in future years.
  • Adopt a similar mix of one-time and ongoing spending proposals similar to that in the Governor’s January proposal to avoid over committing spending in tougher economic times.

The complete LAO overview is available here.

In the coming weeks, the LAO will analyze the proposed budget more thoroughly and release a series of additional budget analysis publications.