Economic data currently is providing plenty of mixed signals to California’s policymakers, as they continue to craft state and local budgets in a constrained fiscal environment. California’s economy now is clearly improving in many important ways, including employment growth. Nevertheless, significant impediments block the state’s path to a more robust recovery from the recent, staggering economic downturn.
Like the economic data, reports concerning state revenues also have been delivering some mixed messages recently, with recent weakness in income tax payments accompanied by speculation concerning a future bonanza of tax revenues due to the possible initial public offering (IPO) of stock by Facebook, Inc. This report provides our updated projections concerning these and other trends in the economy and state revenues.
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