STATE'S ECONOMY COULD BE SLOWING ANALYST ESTIMATES BUDGET WILL LEAVE $726 MILLION SHORTFALL.Byline: MIKE ZAPLER San Jose Mercury News The San Jose Mercury News is the major daily newspaper in San Jose, California and Silicon Valley. The paper is owned by MediaNews Group. Its headquarters and printing plant are located in North San Jose next to the Nimitz Freeway (Interstate 880). SACRAMENTO -- After years of robust growth, California's economy may be cooling -- and that could put a crimp crimp a regular wave formation of small dimensions, e.g. the crimp of wool fibers epitomized in the Merino breed and its derivatives. crimp marks marks made by wrinkling the x-ray film while holding it between the fingers. in Gov. Arnold Schwarzenegger's hopes for an ambitious second term. State tax revenues have dipped in recent months, an independent budget expert said Wednesday in a report that challenges the governor's rosier financial outlook. Assuming the state's economy would continue to hum along, Schwarzenegger unveiled a budget in January that he said would create a $2.1 billion surplus. But the state's nonpartisan legislative analyst, Elizabeth Hill, estimated Wednesday that revenue projections have slowed and his plan would actually leave the state with a $726 million shortfall in fiscal 2007-08. "The Legislature will face major challenges in crafting a budget for the coming year," Hill said. Economists have said for months that a sluggish housing market has dampened economic growth over the past year, but last week state finance officials received more worrisome news: State revenues in January were nearly $1 billion lower than they had projected, thanks to lagging Lagging Strategy used by a firm to stall payments, normally in response to exchange rate projections. personal income tax collections, which are a substantial part of the state's revenues. One explanation for the drop: that a "significant downturn in the economy" is under way, said H.D. Palmer, deputy director of the governor's Finance Department. But he also said the dip could be a fluke fluke, parasitic flatworm of the trematoda class, related to the tapeworm. Instead of the cilia, external sense organs, and epidermis of the free-living flatworms, adult flukes have sucking disks with which they cling to their hosts and an external cuticle that -- the result of high-income taxpayers lowering their estimated tax Federal and state tax laws require a quarterly payment of estimated taxes due from corporations, trusts, estates, non-wage employees, and wage employees with income not subject to withholding. payments at the end of last year. The answer won't be known until after tax season in late April. But some experts say that either way, the late-year tax decline, coming after three quarters of growth, could portend por·tend tr.v. por·tend·ed, por·tend·ing, por·tends 1. To serve as an omen or a warning of; presage: black clouds that portend a storm. 2. wrenching budget battles that Schwarzenegger has been fortunate to avert lately. "The only reason they avoided a fight last year is they had very strong revenue from Google and stock options" tax revenue, said Stephen Levy, director and senior economist of the Center for Continuing Study of the California Economy of Palo Alto Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. . "There's a much stronger chance that this will be a more contentious May and June," he added, referring to the budget season in the Capitol. A windfall of more than $8 billion last year allowed the state to plow more money into education and other popular programs, fostering bipartisan good will between Schwarzenegger and Democrats. A return to budget fights over state programs, Levy said, could "spill over Verb 1. spill over - overflow with a certain feeling; "The children bubbled over with joy"; "My boss was bubbling over with anger" bubble over, overflow seethe, boil - be in an agitated emotional state; "The customer was seething with anger" 2. to the era of cooperation." It's unclear what Schwarzenegger would do if Hill's more pessimistic projections come true. Palmer, the governor's finance official, declined to specify any spending cuts Noun 1. spending cut - the act of reducing spending cut - the act of reducing the amount or number; "the mayor proposed extensive cuts in the city budget" or revenue increases Schwarzenegger would consider. He said the governor is sticking by his January budget and its promise of a surplus until proven otherwise. mzapler(at)mercurynews.com (916) 441-4603 |
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