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Budget News: Revenue Shortfalls May Result in Deeper Cuts

Preliminary numbers show that Brown’s budget plan, which relied on an assumption of $4B in extra revenue, has fallen quite short of that. Revenue last month came in at 9.2% or $541M below estimates needed to prevent further cuts in FY 2012. Reductions to public programs would be far-reaching and perhaps felt deepest by the higher education system and in-home supportive services for the elderly and disabled.

The state says it’s too early to raise concerns over this estimation since the bulk of revenue will be generated during the latter part of the year between December and June when income tax and corporate tax payments trickle in. They remain hopeful that the $1B revenue needed to prevent the triggered cuts will be reached.

The November and December LAO report will determine whether further cuts will be needed.

Additional information available here.

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