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The first version of the governors budget proposal forecasts a $1.6 million deficit, although the nonpartisan Legislative Analysts Office has reported that the administrations math may be too pessimistic in predicting future tax revenues. If the LAO is correct, the state could have $2.8 billion in discretionary reserves at the end of fiscal 2017-18. Proponents of the new scholarship plan tend toward a rosier view of Sacramentos finances and say the Degrees Not Debt scholarship could be phased in over a half decade without messing up state governments budget. California Department of Finance spokesman H.D. Palmer, in reaction to the new proposal, advised lawmakers to consider not only the prospect of next years revenues being greater than expectations, but the possibility that revenues may fall below administration forecasts. Its certainly a laudable goal, but the question is how do you afford it? How do you pay for it?, Palmer said of the program. Replying to a question on Monday, McCarty acknowledged the new scholarship program could be delayed if necessary. The governors office is scheduled to release its revised budget proposal in May. Assemblyman Patrick ODonnell, D-Long Beach, anticipates some give and take after legislators get their turn finish the budget.
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