California's fiscal outlook is strengthening, the budget is looking better and multibillion-dollar reserves are in the offing.
From the Legislative Analyst via Capitol Weekly: "Under Current Policies, $5.6 Billion Projected Reserve at End of 2014–15. The state’s 2013–14 budget plan assumed a year–end reserve of $1.1 billion. Our revenue forecast now anticipates $6.4 billion in higher revenues for 2012–13 and 2013–14 combined. These higher revenues are offset by $5 billion in increased expenditures, almost entirely due to greater required spending for schools and community colleges. Combined with a projected $3.2 billion operating surplus for the state in 2014–15, these factors lead us to project that, absent any changes to current laws and policies, the state would end 2014–15 with a $5.6 billion reserve.
Future Operating Surpluses Projected. We assume continued economic growth in future years. In such a scenario, we project that, under current laws and policies, state General Fund revenues will grow faster than expenditures through 2017–18, when the state’s projected operating surpluses reach $9.6 billion. The state’s temporary personal income tax rate increases under Proposition 30 (2012) expire at the end of 2018, resulting in a more gradual ramping down of these revenues over the last two fiscal years of our forecast. This helps prevent a “cliff effect” in our forecast, as our projected operating surpluses remain stable at just under $10 billion per year in 2018–19 and 2019–20.
The good budget news also is good for schools, who will be assured of getting their minimum funding next year.
From the Cabinet Report's Tom Chorneau: "Applauding the best fiscal outlook for state government in more than a decade, the nonpartisan Legislative Analyst reported Wednesday the minimum funding guarantee for schools next year is likely to be $8 billion higher than current spending."
"In its annual assessment of the state’s economy and the status of next year’s state budget, the LAO almost gushed that a combination of last year’s tax hike, a recovering housing market and slowly-improving economy would leave the state with an operating surplus that would hit nearly $10 billion by 2017-18."
"Still, Mac Taylor, the top executive at the LAO, cautioned lawmakers to be judicious in spending the additional funds – suggesting one-time projects and existing debts should be priorities before new programs or service expansions are considered."
A referendum to block the North Forks casino has qualified for the ballot.
From Capitol Weekly's John Howard: "Foes of a $250 million tribal casino-hotel north of Madera have qualified a referendum for the November 2014 ballot – a move that delays construction on the 305-acre site until voters decide the issue next year."
"The proposed casino, a project of the North Fork Rancheria of Mono Indians, has been approved by state and federal regulators. The tribe’s proposed gaming operation, which is not located on their traditional tribal land, is contained in a compact that has been approved by Gov. Brown and ratified by the Legislature."
"The referendum asks voters whether they want to uphold the North Fork compact or toss it. The referendum also applies to a related compact of the Wiyot Tribe, the secretary of state said, under which the tribe shares in the proceeds of the North Fork casino."
Some rain fell on the north state over the last couple of days, but it didn't make much difference in water supply: The state has issued a grim warning.
From the Chronicle's Michael Cabanatuan: "As the first significant rain of the season fell on Northern California Wednesday, the state Department of Water Resources issued an ominous water supply estimate that makes it clear that much more precipitation is needed this winter."
"In its annual water allocation estimate, usually issued around Dec. 1, the department projects that it will be able to fill only 5 percent of the water requests it has received from the 29 water agencies it contracts with - agencies that serve about two-thirds of California's population."
"Only once before - in 2010 - did the department issue a similarly low estimate of available water. "No drought has been declared," said Ted Thomas, a spokesman for the department. "But it is not a good figure to start."
Nathan Fletcher's bid for mayor of San Diego was rejected decisively, with the former state lawmaker falling short virtually across the board on election night.
From KPBS' Joe Yerardi and Joanne Faryon: " While the vote for second place in San Diego’s special mayoral election appeared to be a tight race last night, an inewsource analysis shows former assemblyman Nathan Fletcher lost in almost every precinct."
"With 581 precincts counted, Fletcher won in just 14. He even lost his own University City neighborhood precinct."
"While Fletcher had broad support with 24 percent of the vote, it wasn’t deep enough to win over entire neighborhoods, said Vasquez, a senior policy analyst at National University System Institute for Policy Research."