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The Legislative Analyst’s new report, detailing how California’s wheezing economy has already poured $8 billion of new red ink into the barely-afloat budget plan passed just three weeks ago, raises the already-high stakes for the May 19th special election.

With state revenues crippled by the recession, leg analyst Mac Taylor says the economic forecast assumptions underpinning the 18-month budget fix passed last month were $8 billion too rosy.Even before this new $8 billion problem, the budget was shakily premised on passage of six ballot measures to be decided at a May 19th special election, which collectively represent nearly $6 billion in revenue needed to make that plan pencil out. This means that the governor and legislature could be facing a brand new deficit of as much as $14 billion on the morning of May 20.

And the outlook for the most crucial ballot measure of the six – Proposition 1A – is problematic, with Republicans shooting at it from the right – because it keeps in place for two more years $16 billion worth of “temporary” tax increases used to balance the budget – and liberal Democrats blasting away from the left – because it puts a cap on state spending that would lock in place some of the cuts made in the same deal.

As a political matter, it also means that any happy horsepuck plan for expanded programs – Universal health care! Better pay for teachers! High speed rail for all! – peddled by the candidates for governor may be dismissed out of hand, at least until they explain precisely how they plan to balance the budget we already have.

The Legislative Analyst’s new report is found here: http://www.lao.ca.gov/2009/bud/feb_overview/feb_overview_031309.aspx