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Fiscal Outlook
Legislative Analyst’s Office
November 27, 2012
www.lao.ca.gov
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What Is the LAO?
Created in 1941
Nonpartisan, Independent Staff to theLegislature
Provides Fiscal and Policy Analysis—Particularly on Budget-Related Matters
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May Revision 2012
2011-12 Ended in Deficit
2012-13 Projected Budget Gap
Total Actions Needed = $15.7 Billion
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State General Fund Budget
Spending by Program, 2011-12
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Actions to Close the2012-13 Budget Gap
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(In Billions)
Amount
Tax Revenues From Proposition 30
$8.5
Related Proposition 98 Increase
-2.9
Other Revenues
0.4
Expenditure Actions
4.6
Borrowing/Funding Shifts/One-Time Revenues
5.8
   Total Solutions
$16.4
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Key Things to Watch: Risks in2012-13 Budget Plan
Proposition 30—$8.5 billion
RDA funds—$3.2 Billion
Revenues
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The State’s General Fund:2012-13 Revenues
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November LAO Fiscal Forecast
Forecast Revenues for Five Years
Forecast Expenditures for Five Years
Subtract
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A Christmas Carolby  Charles Dickens
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Home prices now recovering aftersteep decline
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C:\Users\momalley\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\V4E341AS\Chapter 2 Figure 5 - Home Prices Recovering After Steep Decline.png
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Building Activity is forecast torecover
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C:\Users\momalley\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\V4E341AS\Chapter 2 Figure 6 - California Building Activity Is Forecast Recover.png
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Taxable sales are forecast to growmodestly
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C:\Users\momalley\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\V4E341AS\Chapter 2 Figure 11 - Taxable Sales Are Forecast to Grow Modestly as a Share of Personal Income.png
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Jobs in California RecoveringSlowly
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C:\Users\momalley\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\V4E341AS\Chapter 2 Figure 4 - Jobs in California Recovering Much More Slowly Than in PRior Recoveries.png
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LAO projections of GF Conditionis no corrective actions are taken
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C:\Users\momalley\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\V4E341AS\Chapter 1 Figure 1 - LAO Projections of General Fund Condition If No Corrective Actions Are Taken.png
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Forecasted Operating SurplusesBeginning in 2014-15
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C:\Users\momalley\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\V4E341AS\Chapter 1 Figure 2 - Forecasted Operating Surpluses Beginning in 2014-15.png
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Upcoming LAO Publications
Updated Local Government Timeline
Property Tax Primer
Insufficient ERAF
Cal FACTS
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Other Resources
First name. Last name @lao.ca.gov
•Marianne O’Malley
•Brian Uhler (local finance)
•Chas Alamo (sales and property tax forecast)
Legislative Analyst’s Office:www.lao.ca.gov
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