Dear State Legislators, Don’t do it. Don’t sign off on the new contract Governor Newsom has negotiated with Unit 6. It’s another giveaway to a powerful special interest — Corrections employees — that already collects gobs of money that could be used elsewhere. …

In case you hadn’t noticed, we gave readers a lengthy respite from our missives while the Legislature and Governor negotiated the budget for the fiscal year starting July 1. Through June 10 we had supplied legislators and reporters with several notes describing the need to dramatically boost budget reserves. 27…

If we are reading the laws about school reserves correctly, California’s K-12 schools are being set up for a fall of epic proportions unless schools or the state save much more from surging revenues. Under conditions likely to be met this year, non-basic aid school districts with more than 2,500…

The CA Legislature must pass a budget by June 15. Based upon the Legislature’s Version of the State Budget submitted by Budget Committee chairs, as of now it is on track to make a big mistake. This is a chart of the S&P 500 Index from January 1 1991 through…

The first sentence of Multi-Year Budget Outlook published recently by California’s Legislative Analyst’s Office comes with an important disclaimer [emphasis added]: This report presents our office’s independent assessment of the condition of the state General Fund budget through 2024‑25 assuming the economy continues to grow. With that assumption in mind…

Dear Legislators, With your deliberations over the 2021–22 Budget, you are about to make a most consequential decision. Below is a chart of General Fund Revenues and Transfers from the beginning of the last decade. The blue columns are closed fiscal years. The green column is for the current fiscal…

The 2020 CA Budget Act enacted just 11 months ago forecast the S&P 500 to be at 2,060 in the first quarter of 2021. But because the S&P 500 closed the quarter at nearly twice that level and CA tax revenues are correlated with stock markets, revenues are way ahead…

24 months ago, California’s Department of Finance forecast $151.8 billion of revenues in 2022–23 from the three largest sources: Just 12 months later, DOF revised that forecast down $30 billion:

We have reviewed the May Revision to the Governor’s Proposed Budget for the 2021–22 fiscal year, which starts July 1. Our views are summarized below: Unreliable Revenue Projections. Just seven months after the May Revision a year ago, the Department of Finance revised its projections for General Fund revenues for…