HEADLINES : California
Assembly budget aides expecting $5 billion to $8 billion deficit
Assembly budget officials expect California to face a deficit of about $5 billion to $8 billion next fiscal year, higher than the $3.1 billion projected by Gov. Jerry Brown, according to a legislative memo obtained by The Bee.
The memo itself doesn't explain why Assembly officials believe the deficit will be larger than once projected, but one budget source said it was due to a variety of factors such as uncertainty over legal challenges, additional demand for public programs and a less optimistic view of the economy in the next fiscal year.
At the same time, the "Budget Recap" from Assembly Budget Committee Chairman Bob Blumenfield, D-Woodland Hills, downplays a first-quarter lag in tax revenues of more than $650 million.
To help balance the budget last summer, lawmakers and Brown optimistically decided the state would receive $4 billion in additional revenue in 2011-12. If budget experts determine in mid-December that the state will fall at least $1 billion short of that mark, the state must impose so-called "trigger" cuts to social services and possibly education, depending on the depth of the shortfall.
The Assembly memo blames the first-quarter shortfall more on accounting than economic problems. It suggests that Brown's Department of Finance assigned monthly shares of the $4 billion too heavily for the first few months of the fiscal year. Finance "has made clear that they actually expect the vast majority of the $4 billion will come in through estimated payment and final returns in the months of December through June," the memo notes.

