LAO calls for major spending reductions + Californians want their 911 service to change

Good morning and welcome to the A.M. Alert!

LAO OFFERS DISMAL VIEW OF CALIFORNIA’S FISCAL FUTURE

California can’t afford Gov. Gavin Newsom’s May Revise budget proposal, according to the latest report from the nonpartisan Legislative Analyst’s Office.

“Under our estimates, the state faces operating deficits throughout the multiyear window, meaning revenues would need to come in above our projections for the budget to be balanced,” the LAO noted in its report.

For the budget to balance in 2024-25, revenues would need to be $30 billion higher than what the LAO forecasts.

“Our analysis suggests that level of revenue is very unlikely — there is less than a one‑in‑six chance the state can afford the May Revision spending level across the five‑year period,” according to the report.

The report found that multi-year and temporary spending commitments are no longer affordable, and while the May Revise budget makes several spending cuts, it maintains $11 billion in one-time and temporary spending for 2023-24.

“We recommend this spending be reduced further (from $11 billion to roughly $4 billion) and out‑year one‑time and temporary spending be eliminated entirely,” the report said.

The LAO’s analysis found that state reserves could cover nearly half of the projected multiyear deficits, while cutting $18 billion worth of one-time and temporary spending would cover an additional third.

As for the rest, which adds up to $14.5 billion, that would need to be handled with either more revenue, shifted costs or additional cuts.

“Taken together, reducing spending and using reserves give the Legislature a few years to align revenues and spending as the economic picture unfolds,” according to the report.

CALIFORNIANS WANT THEIR 911 SERVICE TO CHANGE

For 55 years, Californians have been dialing 911 for police, fire and medical emergencies; Californians make more than 25 million such calls annually.

Most Californians believe that the state’s 911 emergency response system needs to change, according to a survey released Wednesday.

The poll, commissioned by Public Health Advocates and conducted by the Berkeley Institute of Governmental Studies, found that 88% of registered voters want major changes to how police and other emergency service providers respond to 911 calls.

Two-thirds (69%) said that they want behavioral health professionals to respond either with or without police to non-life-threatening situations, while just 19% said that law enforcement should just get more training to respond more effectively.

Only 12% said they are satisfied with 911 services as they are.

A majority (67%) of voters said that police are least equipped to respond to calls about mental health crises, while 49% said the same about police responding to people who are homeless.

“California voters throughout the state and across all demographic groups see today’s emergency response system as outdated and in need of a more diverse set of responders,” said Public Health Advocates Executive Director Harold Goldstein, in a statement. “The system is old and needs updating.”

Berkeley IGS surveyed 9,254 California voters in both English and Spanish in August 2022.

“Support for a modernized California emergency response system is overwhelming,” said Mark DiCamillo, director of the Berkeley IGS Poll. “This sentiment is consistent across region, income, age, race, and political party. It suggests an opportunity for bipartisan solutions.”

QUOTE OF THE DAY

“Excited to see these two champions of California’s economic recovery teaming up. While I’ve criticized Elon for running one of my district’s anchor companies into the ground, he & Governor DeSantis deserve credit for the thousands of jobs they’ve brought to CA in recent months.”

– Sen. Scott Wiener, discussing Florida Gov. Ron DeSantis’ planned Wednesday presidential run announcement with Twitter owner Elon Musk, via Twitter.

Best of The Bee:

• Two months after Gov. Gavin Newsom unveiled his plan to transform San Quentin State Prison from a maximum-security prison into a rehabilitation and education facility within the prison system, lawmakers are pushing back saying his proposal lacks a detailed strategy behind it, via Maggie Angst.

• California Attorney General Rob Bonta on Tuesday announced a settlement with Walmart over allegations that the retail giant illegally sold brass knuckles to Californians, via Maggie Angst.

• The San Joaquin Valley’s economy faces “serious slowing in the coming months,” a new analysis of the valley’s prospects says. And that’s a forecast that doesn’t take into account any potential upheavals should the federal government hit its debt ceiling next week, via David Lightman.