Gov. Brown Release Revised Budget, Deficit Nearly Doubles Size Forecasted in January

Governor Jerry Brown released his May revised budget today reflecting a larger than expected budget shortfall of $15.7 billion from $9.2 billion in January 2012. the governor had been warning the state electorate of the dire state of the budget for over a week while keep a lid on the actual details until this past weekend in his YouTube address.

Brown attributes the $6.5 billion increase in the budget deficit to three factors:

• an overly optimistic revenue forecast by $4.3 billion;
• Unexpected spending increase by $2.4 billion for K-14 education related to Prop. 98; a
• nd the federal government and courts blocked California’s attempt to achieve cost saving through cuts in fees to MediCal Providers and requiring co-payments from MediCal participants.

To close the gap, the governor is proposing additional cuts in the form of freezing the court construction program for another year and using local reserves to offset General Fund costs for local trial courts on a one‐time basis;  making cuts to hospital and nursing home funding to lower Medi‐Cal costs; and reducing In‐Home Supportive Services  hours by 7 percent.

Read the budget summary of the 2012-13 California budget.