LAO: new revenue forecast $24 billion below Governor's January budget projections
The Legislative Analyst’s Office (LAO) has updated its December 2023 revenue forecast, using recent revenue and economic data. This updated revenue forecast is about $24 billion below the Governor’s January 10 budget projections across the “budget window” (the 2022-23 through 2024-25 fiscal years). This is consistent with the state’s weak tax collections in December and January, as discussed recently.
A lower revenue forecast tends to increase the deficit to address in the 2024 state budget process, as well as decrease the Proposition 98 minimum funding guarantee for schools. In general, for every $1 of revenue decrease in the budget window, the non-Proposition 98 budget deficit increases by 50 cents or more, and the Proposition 98 minimum guarantee often decreases by about 40 cents.
The LAO release is here: https://lao.ca.gov/LAOEconTax/Article/Detail/777