Apparently, some members of the Legislature were interested in a preview of coming attractions regarding the revenue picture and asked to Legislative Analyst for a preliminary estimate of what the May Revise might show. In a semi confidential memo to the members the Analyst indicated that the revenues over the next 2 years will be down by about $3.4 billion from the January Budget estimates. This is a net figure over the 2 years, which is composed of a $1.4 billion gain in the 2000-01 fiscal year, and a $4.8 billion drop in the 2001-02 fiscal year. These estimates relate only to the change in the January revenue estimates. It does not take the total budget picture into consideration with regard to revenues and expenditures. The energy crisis costs will be only one component that will need to be dealt with in the overall budget development exercise. It is unlikely that the May surplus revenue feeding frenzy of the past few years will occur this year.

Some Capitol denizens think that the foregoing revenue picture is optimistic, and it could be considerably grimmer. It’s certainly true that a politician running for election in 2002 might want any fiscal pain to fall the year before the election rather than the year of the election. In this regard it would not be surprising if the actual May Revision, due next Monday, painted a bleaker picture. Spending reductions will hit one-time items first. Some education spending reductions may occur, but the bulk of the impact should be on other parts of the budget.

SCHOOL FACILITY IMPROVEMENT DISTRICT LEGISLATION PASSES SENATE EDUCATION — Yesterday the Senate Education Committee passed SB 1129 (O’Connell) with only one dissenting vote. This measure, as noted in yesterday’s Fast Fax, will allow districts to conduct elections in School Facility Improvement Districts under the Proposition 39 55% majority vote provisions. The measure will next be heard on the Senate Floor.