On the first day it really rained, Gov. Brown was extolling rainy day funds. Be mindful of this apt metaphor as the Legislative Analyst’s Office (LOA) predicts an escalating $5.6 billion budget surplus in 18 months and the state’s unemployment rate dips to 8.7%.
“The question is, ‘When do we get to the next valley?’,” the governor asks. “And the only way to avoid that is to put it in a rainy day fund, to say no when necessary, along with saying yes when appropriate.”
Remember, the last 6 years of fiscal rainy days have witnessed a slow, tragic parade of drastically reduced social programs, education, and infrastructure maintenance. There is much to renew while we consider what new is needed.
As Mac Taylor, the legislative analyst, adds, “Continued caution is needed, given that these surpluses are dependent on a number of assumptions that may not come to pass. For example, as we discuss in this report an economic downturn within the next few years could quickly result in a return to operating deficits.