Uncertainty of an economic downturn will complicate negotiations as Gov. Gavin Newsom and legislative leaders head toward a June 15 deadline to pass a state budget. The good news, at least for schools and community colleges, is that even if state revenues were to plummet, they’d be far better positioned to weather a sizable downtown than in the past – for reasons of foresight and luck. The independent, nonpartisan Legislative Analyst’s Office and other budget mavens agree on that point.
In a mid-May analysis, the LAO wrote that a combination of indicators points to an economic recession in the next two years: falling consumer confidence, rising inflation, a tight labor market and slowing home sales.
Legislature Disagrees With Newsom On How To Spend Additional Billions For Education
Although “past experience does not guarantee that we are heading for a recession,” the LAO wrote, “the chance of a recession is high enough to pose a significant risk for the budget.”
