*Report: State budget faces deeper-than-expected shortfall

That means $2 billion worth of cuts will likely be triggered next month - much of it in K-12 reductions. A new report by the Legislative Analyst's Office expects California to fall $3.7 billion short of the $4 billion revenue bump the state was supposed to have received this year. The absurdly optimistic prediction was instrumental in getting a budget deal last June, but in the subsequent months it's become clear that revenues are not meeting those projections. The enacted budget had the state receiving $88.5 billion in revenues and transfers, while the LAO says it will be $84.8 billion. From Capitol Alert:

If Finance issues a projection next month similar to the analyst's, the state must cut K-12 funding by $1.4 billion. It must also slash University of California and California State University systems by $100 million each. The state's developmental services program would lose $110 million, while In-Home Supportive Services would see a $100 million reduction. The Legislature and governor could still intervene before those cuts take place in January and February. The K-12 cut would be the most controversial, given the priority voters place on public education, the influence of K-12 advocates and the fact that 143 of the state's 1,032 school districts are in financial jeopardy.

The irony is that California's economy is clearly one the mend - tech and exports are two big reasons - and to a large extent it's reflected in tax revenues. But the improvement has been incremental, and Gov. Brown, along with state lawmakers, were factoring in a much larger influx.

Here's the LAO report.

*State Finance Director Ana Matosantos says some mid-year cuts are likely.