California budget watchdog sees state budget gap of $1.9 bln

SAN FRANCISCO Wed Nov 14, 2012 4:44pm EST

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SAN FRANCISCO Nov 14 (Reuters) - California faces a $1.9 billion budget gap for its next fiscal year, a considerably smaller deficit than seen in prior years as a result of economic recovery, spending cuts and new revenue from tax increases approved last week by voters, the state's budget watchdog agency said in report on Wednesday.

"Our economic and budgetary forecast indicates that California's leaders face a dramatically smaller budget problem in 2013-14 compared to recent years," the report by the Legislative Analyst's Office said.

"Furthermore, assuming steady economic growth and restraint in augmenting current program funding levels, there is a strong possibility of multibillion-dollar operating surpluses within a few years," the report added.

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