State coffers looking a bit better

Revenues for November came in about $500 million above projections (big month for personal income taxes). But year to date that still leaves the state $1 billion behind in revenues and $2 billion in expenditures. The shortfall will likely trigger a bunch of cuts in education, though some lawmakers are trying to weasel out of their agreement last June to make additional trims if mid-year revenues came in below a certain level. "Regardless of whether midyear cuts are enacted next week, the Legislature faces a tremendous fiscal challenge when it returns to session next month." said Controller John Chiang. Some analysts question the reliability of these monthly figures, pointing out that much of the state's revenue stream comes in later in the fiscal year. From the controller's report:

The economic recovery continues in the Golden State, and is even accelerating past the U.S. in many areas. Still, the failure of the additional $4 billion in revenues to materialize means that mid-year cuts may occur. That would affect K-12, community colleges, and the university systems in the state along with several other social services. Revenues continue to improve, but California is not out of the woods. There is still an imbalance between what's being received and what we are spending. Ultimately, revenues will not be back to their pre-recession peaks for some time, which means that there are still many tough decisions ahead.