California has a budget surplus. A new forecast from the state non-partisan Legislative Analyst’s Office finds the state is saving enough money to weather a couple of years of moderate recession.
Ann Hollingshead is the LAO report author.
"California’s budget outlook is very positive this year, but there are some uncertainties looming on the horizon, particularly in respect to federal decisions on taxes and health care," Hollingshead said.
The LAO did not try to predict changes to the budget from those federal decisions. The report does estimate that the state will continue to expand its record reserves, provided the economy continues to grow and lawmakers do not significantly increase spending.
By 2019, California could have almost $20 billion in reserve funds. The report says that’s enough to last through two years of a moderate recession without budget cuts.