Fiscal cliff stumble could doom California's budget recovery

Sacramento Bee

Gov. Jerry Brown and California lawmakers struck an upbeat tone in recent weeks as they enjoyed their most positive budget outlook since the economic downturn. Whether that mood survives the winter depends on Washington. State budget experts say the biggest immediate threat to California finances is a recession triggered by automatic federal cuts and tax hikes, absent a political deal to avoid the so-called "fiscal cliff." The state's biggest federal program, Medi-Cal, is spared from automatic cuts. But a new recession could threaten the state tax revenue that serves as the lifeblood for California government.

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