Legislative Analyst Mac Taylor says a budget that less than three years ago had a $26 billion dollar deficit is now headed for a $2 billion surplus. That’s on top of an extra $3 billion in extra revenue earmarked directly for schools and community colleges.
But Taylor is still urging caution. “The last thing that we would want the legislature to do is to be in the same shape it was in 2008, when we went into the Great Recession – where we had no reserves and we had an underlying budgetary problem,” he says.
So even though the surplus is projected to grow over the next several years, Taylor is still recommending only limited new spending commitments. He says the legislature should put most of the extra money toward building a reserve, paying down debt and addressing unfunded retirement liabilities.