UCLA Anderson School of Management | Media | UCLA Anderson Forecast Warns of Possible Recession in 2005 or 2006 for the US Economy
...and check out this language about California, putting it together with the preceding post about mass illiteracy in LA with no end in sight:

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The state budget is the big issue in California, as the essential structural imbalance – spending more than revenue income – remains. In his overview of the state’s economy, UCLA Anderson Forecast Senior Economist Joseph Hurd notes that the imbalance is being “funded” by state borrowing of $15 billion (based on Proposition 57) from cities and counties across California.

“The economic implications of the budget mess are not good,” Hurd said. “In the short run, cities and counties will shed employment due to the ‘loans’ they are being forced to give the state. We expect total job losses of about 45,000 at the state and local level in 2004 and 2005.”

Hurd’s report, titled “California: Growing and Growing … But a Few Fixes are Needed,” assumes that Sacramento “solves” the budget problems by the next fiscal year. He speculates that it will be a combination of taxes, user fees and spending cuts, while “California becomes the gambling capital of the nation (and partly lives off casino income).”

Not solving the budget issue has a big impact on the annual long-term forecast, as the postponement of building maintenance and other infrastructure projects will be put off indefinitely.

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