When this year’s state budget was first enacted back in April, the budget gap for fiscal 2010-11 was projected at $2.17 billion. The First Quarterly Financial Plan Update in July more than doubled this estimate, to $4.62 billion. And today’s Mid-Year Update says next year’s gap has grown by another 47 percent—to $6.8 billion.
The governor’s proposed Deficit Reduction Plan (DRP) for the current fiscal year would yield only $434 million in recurring savings, today’s report indicates. Thus, under the best-case scenario, the state’s budget hole for the year starting next April 1 will be at least $6.36 billion, or more than three times larger than projected when this year’s budget was adopted.
The “out years” of the financial plan are also uglier, with the 2011-12 and 2012-13 gaps each growing by about $1 billion—to $14.8 billion and $19.25 billion respectively—assuming no DRP is enacted this year. If the governor’s current deficit-closing plan is accepted, those gaps won’t be much different: $14.32 billion in 2011-12 and $19.06 billion in 2012-13.
Sooner or later, the Governor and the Legislature have to get around to making some actual spending reductions.
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