“KEY TAKEAWAYS
Very Unlikely the State Will Be Able to Afford the May Revision Spending Levels. Under our estimates, the state faces operating deficits throughout the multiyear window, meaning revenues would need to come in above our projections for the budget to be balanced. While the revenues required to balance the budget are optimistic, but plausible, in the budget window, they are improbable in the out-years. For example, to eliminate the operating deficit in 2024-25, revenues would need to be roughly $30 billion higher than our forecast. Our analysis suggests that level of revenue is very unlikely—there is less than a one-in-six chance the state can afford the May Revision spending level across the five-year period. This means that, if the Legislature adopts the Governor’s May Revision proposals, the state very likely will face more budget problems over the next few years.”
