California's nonpartisan legislative analyst is forecasting a $2.8 billion budget surplus next year and says California should be able to weather a mild recession without major budget cuts over the next four years.
Legislative Analyst Mac Taylor released his annual budget outlook Wednesday. It sets the stage for negotiations that begin in January when Gov. Jerry Brown releases his proposed spending plan.
The projected surplus signals a likely showdown between Brown, who prefers cautious spending growth to prepare for recession, and Democratic legislators who are eager to expand services.
The analysis accounts for ballot measures approved by voters, including the extension of a temporary tax increase on the wealthy. It does not reflect changes in federal spending that may come from President-elect Donald Trump and the Republican-controlled Congress.