California: Is Too Much Cash a Bad Thing?

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CHART OF THE WEEK

Source: State of California, May Revision
Source: State of California, May Revision

INTERESTING READS

continued revenue growth could increase the state’s constitutional funding obligations enough to cause large recurring budget deficits … for every dollar of tax revenue above the SAL [state appropriations limit], the state faces approximately $1.60 in constitutional funding obligations. Based on our scenario analyses, if revenues exceed median expected growth, SAL requirements very plausibly could reach $20 billion to $45 billion by 2025–26

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