Nielsen Responds To LAO Revenue Report of $13 Billion Deficit

Wednesday, November 16, 2011

SACRAMENTO (November 16, 2011) - Assemblyman Jim Nielsen (R-Gerber), Vice Chair of the Assembly Budget Committee, issued the following statement following a new revenue forecast issued this morning by the nonpartisan Legislative Analyst's Office (LAO). The LAO said the deficit for the year beginning July 1, 2012 would be nearly $13 billion. Based on previous budget deals California would impose a $2 billion in mid-year "trigger" cuts next month, mostly through K-12 school reductions.

"The Legislative Analyst's Office report indicates, as predicted, that the budget passed by Democrats with only a majority vote was overly optimistic and based on shaky assumptions," said Nielsen. "In this budget, state spending is predicted to increase by 12 percent by 2012-2013. It is clear that state spending has not been brought under control, and that's not even factoring in the enormous cost of the federal healthcare mandates."

"It indicates that a lot more needs to be done to get California's budget under control, and that does not happen through tax increases," said Nielsen. "Government has changed very little in how it conducts its business in the last three years."

The analyst's report is not the only determinant of whether the state will impose the "trigger" cuts, but it is one of two measurements the Department of Finance must rely upon before deciding whether to reduce spending. The Department of Finance will issue its own forecast in December.