The state budget deficit has increased to about $16 billion, primarily due to continuing problems in the housing market and high energy prices, according to an independent budget analysis released Wednesday.
In January, Gov. Arnold Schwarzenegger pegged the size of the budget shortfall at $14.5 billion for the 2008-09 fiscal year, which begins July 1.
Despite recent moves to sell bonds, delay payments and adopt cuts in education and health care, Legislative Analyst Elizabeth Hill said the state's budget continues to deteriorate. In essence, California's economy continues to bring in fewer tax dollars than anticipated.
In a critical look at Schwarzenegger's spending proposal, Hill called his administration's budget-balancing approach "flawed" because it fails to prioritize state programs.
"We recommend the Legislature reject the administration's across-the-board (cutting) approach," the report said.
The report lays out an alternative budget that proposes to eliminate nonessential state programs, shift programs to local control and reduce school funding by less than the $4.3 billion the governor suggested. It also recommends closing tax loopholes to add revenue in a "reasonable manner."
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