News Archive - November 2011Contents:
November 11, 2011 Budget Triggers November 2011 Update Four months ago Governor Jerry Brown signed a budget with an optimistic assumption that California would receive $4 billion in extra revenue, thus balancing the budget. Since this additional $4 billion in revenue was speculative, the Legislature built in automatic mid-year budget cuts, to occur in January 2012 if revenues are projected to be lower than the budget estimate. In January the Director of the Department of Finance is charged with looking at state income from July through December 2011, projecting income for January through June 2012, and thereby estimating state income for the full year. If the estimate is $1 billion or more below the budget estimate, then cuts called the “Tier 1 Trigger Cuts” will automatically occur. If the estimate is $2 billion or more below the budget estimate, then cuts called the “Tier 2 Trigger Cuts” will automatically occur. The Tier 1 cuts include $23 million in cuts to CDD child development programs. Tier 2 does not have any cuts to child development (Tier 2 cuts fall heavily on school districts, community colleges, CSU and UC). Yesterday, November 10, 2011 California State Controller, John Chiang, announced that October tax receipts were $810.5 million below expectations. According to the Controller's report, after accounting for October revenues, total year-to-date General Fund revenues are now behind the 2011-12 State Budget estimates by $1.5 billion and expenditures are over projections by $1.7 billion. "October's poor revenues capped a very disappointing first four months of the fiscal year," said Chiang. "Unless revenues and expenditures begin to track with projections, the State will face increasing cash pressure in the months ahead." For more details, read October 2011's financial statement: The Department of Finance also publishes a monthly Finance Bulletin. (http://www.dof.ca.gov/finance_bulletins/) October's bulletin is posted online and includes the monthly cash report for September. November's bulletin will be posted shortly. CCDAA will keep members updated as we monitor state revenues in coming months. |