On Thursday, the Legislative Analyst Workplace pegged the funds’s complete borrowing — on and off the books — at $21 billion.
Though this funds is lower than 4 months previous, the annual budgetary cycle will quickly start anew.
All indications level to a different 12 months of dealing with a multibillion-dollar deficit. Main revenues have been operating a number of billion {dollars} forward of estimates within the present funds, however not almost sufficient to markedly shrink the structural deficit.
“Despite the recent revenue strength, California’s budget condition remains fragile,” the state Meeting’s prime funds advisor, Jason Sisney, says in a memo this week. “There are many indications that an investment bubble from the so-called ‘artificial intelligence’ industry is fueling recent tax revenue gains.”
Sisney accurately added that “Bubbles can lead to dramatic state tax revenue declines when they burst.” That’s what occurred a couple of quarter-century in the past when the “dot com” bubble burst, creating a big state funds deficit.
“Most of the state’s rainy day fund has been used to balance the last two budgets, and the state’s large cash balances largely are unavailable to help fix a structural deficit in the General Fund,” Sisney observes.
Dan Walters is a CalMatters columnist.
