Surviving a Revenue Collapse: Shortfall and Recovery in California

In: Public budgeting & finance, Band 10, Heft 4, S. 62-71

Abstract

Substantial revenue shortfalls have to be reckoned with, no matter what their cause or what the cost. California found itself in such a situation late in the 1987–88 fiscal year. On April 22, 1988,' it ascertained that tax receipts were falling behind forecasted revenues. This led to the prediction of a $1 billion shortfall for California in 1987–88 and again in 1988–89. The article reviews the causes of the shortfall and describes the actions taken by the governor and the legislature to balance the budget.