Analyst: Calif. Will Have To Confront Growing Deficit

Enlarge Rich Pedroncelli/AP

During a news conference, legislative analyst Mac Taylor says California could face a nearly $21 billion budget deficit over the next year and a half.

Rich Pedroncelli/AP

During a news conference, legislative analyst Mac Taylor says California could face a nearly $21 billion budget deficit over the next year and a half.

A new report estimates that California officials will face a budget gap of nearly $21 billion over the next year and a half.

Not only is there no light at the end of the tunnel of California's annual budget deficit — there's not even an end to the tunnel.

"I think it's going to be a very difficult year," says Mac Taylor, California's legislative analyst. He leads nonpartisan budget experts that advise state lawmakers.

Taylor says the state may come up about $6 billion short by next July, $14 billion short the fiscal year after that, and at least $20 billion in the red every year for the next five years.

"It's a very large problem," Taylor says. "Frankly, we think that the Legislature, it's going to take them kind of a multi-year process to continue to dig themselves out of this hole."

The nonpartisan analyst suggests that a tax increase should be considered, though Gov. Arnold Schwarzenegger opposes that.

Deep spending cuts may also be impossible. That's because California already is at the bare minimum on education and health-care spending, if it wants to qualify for federal stimulus dollars.

Perhaps it's no surprise that the state's outgoing finance director was recently quoted as saying he researched whether California could switch from being a state to a federal territory — a way of having the federal government step in to solve what state officials cannot.