The state budget is in good shape to weather a moderate recession, and lawmakers should be able to sock away more money in reserves next year, according to projections the nonpartisan Legislative Analyst’s Office issued Wednesday.
The LAO’s outlook shows the state would finish its 2018-19 budget year with more than $19 billion in reserves – assuming lawmakers and Gov. Jerry Brown don’t make any more spending commitments. About $11 billion is obligated for the state’s rainy-day fund.
Lawmakers could spend about $7.5 billion of the surplus, although analysts recommend that they save it to prepare for a recession.
The Legislature also probably will have flexibility to spend several billion dollars in money that’s set aside for kindergarten through community college education, the report says.
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