SACRAMENTO -- California's finances are bouncing back after a lengthy recession, and tax revenues are primed for strong growth over the next several years, according to a report issued Wednesday by the Legislature's budget analyst.
"We now find that California’s state budget situation is even more promising than we projected one year ago," said the report from the Legislative Analyst's Office. "The state’s budgetary condition is stronger than at any point in the past decade."
The state is on track to end the current fiscal year next June with a reserve of $2.4 billion, more than twice the original estimate of $1.1 billion, thanks to higher-than-expected tax revenue, the report said. California's school funding formula is also expected to send $3.1 billion more to schools.
By 2020, state revenue could be $27.1 billion higher than the latest projections for the current fiscal year, according to the report.
Increased revenue could help cushion the state when temporary taxes under Proposition 30 expire in 2018. The analyst's office projects a $9.6-billion surplus that year.
"This helps prevent a 'cliff effect,' " the report said.
The analyst's office cautioned that surpluses are dependent on several factors, most notably continued growth in the stock market. More federal budget standoffs in Congress, like the country has experienced in the past year, could harm California's finances.
Assembly Speaker John A. Pérez (D-Los Angeles) issued a statement saying the new numbers "validate the wisdom of the fiscal actions the Legislature and governor have taken." He said he would continue pushing for a new ballot measure to help California save money in a rainy day fund, something the state has lacked in recent years.