Revenue estimates to determine 'trigger cuts' to education, healthcare


A shortfall could trigger cuts to higher education, healthcare and schools. The numbers have not looked good.

/*California State University*/ students all over the state expressed their frustration over a possible $500 tuition hike next fall, if the state legislature and governor fail to give the school system more money.

But looming around the corner is a possible $100-million cut to CSU in a few short weeks. That's on top of this year's $650-million cut.

Cal State is one of many line items in the state budget slated for mid-year cuts that are triggered automatically if the state fails to collect $4 billion forecast.

The latest state Department of Finance figures show California is $1.3 billion below forecast for the first four months of the fiscal year.

Just last week, State Controller John Chiang also said tax revenues were down $1.5 billion.

Investment managing director Joe Eschleman doesn't believe the economy is strong enough to be $4 billion above forecast by June.

"We don't have as much momentum as it would take to generate the type of tax revenues needed to avoid these triggers," said Joe Eschleman, Wells Fargo Advisors.

One game-changer could be the holiday season. More people could be working and shoppers could open up their wallets a little more to boost the income and tax revenues for the state.

And the Brown administration says much of the income taxes come in December through June.

"Personal income tax is always the biggest revenue source for the state, and that's the one we've been watching the closest," said H.D. Palmer, /*California Department of Finance*/.

But people on the trigger-cuts list aren't as optimistic. Cal State has already cut back.

"Put off some deferred maintenance for projects around campus, cut way back on travel. We've also implemented energy efficiencies to save money there as well," said Cal State Spokeswoman Kim Nava.

All eyes will be on the Legislative Analyst's Office new numbers out Wednesday.

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